Private Briefing August 2024
No. 137 | Year XII
August Private Briefing continues analyses of segmented support programs from the Ministry of Economy, focusing on support for hunting, fishing, and beverage production, and women’s entrepreneurship. In the context of such segmentation, the analysis of the EBRD’s Women in Business comes as the focal topic. In over a decade it has profiled into a leading initiative of its kind, in the region and now globally, setting an example for blended support. Additionally, we analyse subsidies for livestock farmers, which will have particular importance this year in the context of the impact of weather conditions.
Grants for development of processing capacities
// The increasingly noticeable tendency of the Serbian Ministry of Economy to achieve a clearer focus and greater investment impact through the segmentation of support for businesses has led to the further expansion of the range of support programs. This time, we analyse the Public Call for support in the development of processing capacities in the fields of hunting, fishing, wine production, beer production, and the production of strong alcoholic beverages. This initiative is aimed at legal entities and entrepreneurs registered before December 31, 2021, registered for activities within these sectors. A total of 500 million dinars has been allocated for the implementation of the program, for co-financing the purchase of new equipment, machinery, delivery vehicles, as well as investments in energy efficiency and ecological aspects of production. In addition to equipment, the funds can also be used for the construction, reconstruction, or adaptation of production facilities.
// The applicant can receive a grant of up to 30% of the total investment value, while the remaining 70% can be financed through a loan from the Development Fund. If the total investment value exceeds the maximum amount, the beneficiary is required to finance the difference from their own resources. Under this program, only activities directly related to the production of tradable goods are supported, with a particular emphasis on improving energy efficiency and ecological standards. The minimum investment amount is 833.000 dinars, of which 250.000 dinars represents a grant, and the maximum acceptable by this program is 16.66 million dinars, or 5 million dinars in grants. Development Fund loans are approved with a repayment period of up to five years, including a one-year grace period. The minimum loan repayment period is three years, and the interest rate depends on the type of collateral provided, ranging from 1.5% if the loan is secured by a bank guarantee, to 2.5% for loans secured by other means. The Fund accepts various forms of collateral, including bank guarantees, mortgages on real estate, agricultural, forestry, or construction land, as well as pledges on equipment and personal guarantees.
// The program, especially from the perspective of the repayment period but also the shortened investment return period, appears to be an excellent opportunity for advancements in sectors with great development and export potential, where investments in equipment and process modernization are a direct need to ensure growth, quality, traceability, and sustainability of production and enterprises. Considering current global trends, which include a preference for nearby suppliers and the added value of locally sourced goods, the support program for processors provides significant assistance to companies in Serbia that aim for modernization and market competitiveness. The public call remains open until the end of 2024 or until the available funds are exhausted, making it an excellent opportunity for eligible applicants to improve their operations with state support.
EBRD Women in Business Program: A Decade of Growth and Development
// The “Women in Business” program, organized by the European Bank for Reconstruction and Development (EBRD), represents a unique form of support for companies led by women, focusing on their economic empowerment. Available through numerous financial institutions in the region, the program has been combining advisory support with specially tailored banking services for a full decade. The advisory component provides women entrepreneurs with numerous opportunities to enhance and grow their businesses, while the banking component facilitates access to financing, making “Women in Business” a comprehensive support tool. After a successful pilot phase, the program is now fully developed and available to women entrepreneurs across the region and globally. In addition to financial and advisory support, the program offers specialized training, seminars, webinars, and workshops, as well as networking opportunities, further contributing to the development of knowledge and skills for women in business..
The reasons for creating the Women in Business program lie in statistical indicators, which clearly show that businesses led by women account for around thirty percent of the total number of businesses in the region, their share of total turnover is about 20%, and they participate in total financing with only about 10%. To change this situation, the program has provided tens of millions of euros in credit support to thousands of women-led businesses, under particularly favorable conditions in terms of cost and reduced collateral. Simultaneously, hundreds of targeted seminars, workshops, and other events have been organized to improve business knowledge and skills and share experiences. Altogether, the overall effects of the program go beyond benefits for individual participants, as encouraging the establishment, growth, development, and financing of such companies contributes to better utilization of economic resources and positively impacts economic activity and GDP growth. It also adds a particular note of inclusiveness and sustainable development to the entire economic environment.
In an economy that is increasingly transforming from global to multipolar, in an environment that is changing ever faster due to new impulses of technological progress, one of the key challenges for businesses remains how to achieve sustainable economic growth. While we are still witnessing a very complex combination of factors such as inflation, energy uncertainty, and disrupted supply chains, accompanied by a very challenging situation in the labor market, our continuous
business sentiment research shows that the best results are achieved by businesses that are ready to adapt and identify and seize new opportunities available. This is exactly the current situation for companies from the Western Balkans region, which have the opportunity to take on much more significant positions in the changing economic paradigm, where “resilience” and “nearsourcing,” i.e., replacing distant suppliers with those from the region, are key pillars.
// In addition to financial support and access to knowledge, Women in Business, like most EBRD support programs for small businesses in the region, carries with it strong advisory support provided by consulting firms specially selected by the EBRD. The support begins with an initial assessment based on a standardized model and then covers a range of elements such as establishing or improving management systems, finances, sales, marketing, or creating an entirely new business structure, all depending on the specific needs of the beneficiary. This is accompanied by intensive training and support during the implementation period to ensure that improvements are fully absorbed and put into operation. Glenfield is one of the most experienced consulting firms with leading expertise and proven practical results in supporting SMEs, including the EBRD Women in Business Program in this part of the world. We have supported numerous clients through projects tailored to their specific needs and are open to sharing our experience and supporting users in their efforts to become new champions in the current business climate and the new deal it brings, within the significant support package provided by the program. Our support starts with a free initial assessment and needs analysis, and with information about financial institutions that implement this unique program in your region, this could be the first step towards taking advantage of the opportunity that the Women in Business program offers.
Ministry of Economy: Grants and Loans for the Sustainable Women-Led Businesses
// The Ministry of Economy, in collaboration with the Development Fund of the Republic of Serbia, has launched a brand-new support program called the Program for Supporting Entrepreneurship Development through Financial Support for Women Entrepreneurs and Single Mothers. This narrowly targeted program was created based on recognizing the challenges these groups face and aims to contribute to their empowerment primarily through tailored financial instruments. In the current business environment, characterized by increasingly intense competition, women entrepreneurs and single mothers face specific challenges, such as a lack of collateral or accumulated working capital, which play a significant role in the sustainable business development. The program is therefore specifically designed for women entrepreneurs and micro and small businesses where women are founders, legal representatives, or business leaders. Additional emphasis is placed on single mothers, who can receive up to 55% of the investment value as a grant, while other categories of women entrepreneurs can receive up to 50%. This approach allows resources to be directed to those who need support the most, ensuring a higher degree of inclusivity and distribution of support effects.
The total available program budget is 100 million dinars, while the individual grants range from a minimum of 200.000 dinars to a maximum of 3 million, depending on the scope and specifics of the proposed projects. Users are provided access to education and advisory services through collaboration with accredited regional development agencies, where they can acquire the necessary knowledge and skills for successfully running a business, with free training and technical assistance that facilitate preparation for applying for funds and reduce administrative barriers. The support provided
by regional development agencies is implemented through the Standardized Service Package Program, signed by Glenfield, and delivered by certified trainers equipped with a set of tools and best practices. The program allows users to utilize funds for a wide range of needs, from purchasing new equipment, improving technology, and adapting business premises to covering operational costs, with the limitation that operational costs can account for up to 25% of the total investment, thereby increasing the program’s flexibility and enabling adaptation to the specific needs of each beneficiary
A fragmented approach, tailored to specific target groups, allows for precise addressing of their unique challenges, such as limited access to capital, restricted support networks, and insufficient recognition of business potential by the market. Such programs provide women with the opportunity to focus on developing their skills and achieving long-term success. This approach also builds users’ confidence, as their specific needs are recognized and supported, encouraging innovation and growth. Additionally, creating user communities through these programs enables the exchange of experiences and support, strengthening cooperation networks and long-term business connections. Instead of a universal approach, specialized programs ensure that support reaches those who need it most, while also contributing to breaking stereotypes and promoting diversity as an element of success.
// This approach provides businesses led by women and single mothers with targeted financial support, making it easier for them to start or expand their operations in a competitive environment. The combination of grants and favourable credit terms offered by the Development Fund allows them easier access to capital, which is often the biggest obstacle to entering the market or expanding activities. The funds can be used for key investments such as purchasing equipment, improving technology, or adapting business premises, as well as partially covering operational costs, which increases the program’s flexibility and contributes to long-term sustainability and competitiveness. In addition to financial assistance, training programs and advisory support further develop the beneficiaries’ business skills, strengthening their ability to manage resources efficiently and plan future activities. In this way, the support not only creates a financial foundation creates a financial foundation for business sustainability but also provides the knowledge necessary to build stronger business initiatives and achieve success on that foundation, making the program highly recommended.
Directorate for Agrarian Payments: Fattening Cows and Calves Subsidies
// The Ministry of Agriculture, in collaboration with the Directorate for Agrarian Payments, has announced a Public Call for applications for livestock farming incentives for 2024. The focus of this call is on supporting cattle breeders engaged in raising calves for fattening, providing them with substantial financial assistance during challenging times. The Public Call for livestock farming incentives offers a significant opportunity for legal entities, entrepreneurs, and individual bearers of registered agricultural households to improve their operations through available incentives. To qualify for these incentives, it is only required that they meet the legally prescribed parameters of registered livestock production for fattening cattle, ensuring that subsidies contribute to the sustainability of the sector.
The incentives apply to cows that calved between April 1, 2023, and March 31, 2024. As with other livestock subsidies, the incentives per animal are paid once during the calendar year, and the total amount of available non-refundable funds under this program is one billion dinars. Given that the subsidy per animal is 20,000 dinars, this substantial budget effectively provides significant financial support to livestock farmers across the country.
With around 5,000 farms engaged in cattle fattening and the number of subsidized animals expected to reach 50.000, this program can generate a considerable impact. Additionally, there is a possibility of an extra 10% subsidy for cattle breeders in the Toplica, Jablanica, and Pčinja districts. These additional percentages are directed at areas facing specific challenges, providing them with an extra incentive for development..
// These incentives come at just the right time, especially considering that the corn yield, which is the primary feed for livestock, is expected to be significantly below average this year due to unfavourable weather conditions. Consequently, the price of corn is expected to rise, further straining the budgets of livestock farmers and affecting not only their development plans but also the current sustainability of their operations. In such circumstances, subsidies and the possibility of an additional 10% for certain regions can significantly contribute to maintaining financial stability and further development of farms. Furthermore, the certainty provided by regular subsidies will undoubtedly ease planning and targeted investments to ensure the stability of farms, despite market fluctuations and rising production costs. With such foundations and the ability to plan at least part of their income, it is also possible to set basic parameters for managing farm financing and to implement other solutions for long-term improvements by utilizing other available agricultural support programs, from regular small calls to large support programs like IPARD. Therefore, this and other calls for subsidies represent a highly significant and useful model of support within the range of regular support programs available to farmers.
| KEY ECONOMIC INDICATORS | Aug - 24 | |
|---|---|---|
| 1 | Annual inflation | 4,30% |
| 2 | Reference interest rate | 6,00% |
| 3 | Unemployment rate | 9,40% |
| 4 | Average net salary - RSD | 95.804 |
| 5 | Average pension - RSD | 45.709 |
| 6 | Exchange rate RSD/EUR | |
| On the last day of the month | 117,0553 | |
| Average exchange rate for the month | 117,0507 | |
| 7 | Exchange rate RSD/USD | |
| On the last day of the month | 108,1242 | |
| Average exchange rate for the month | 107,9520 | |
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