Private Briefing December 2024
No. 141 | Year XII
The Private Briefing concluding 2024 comes with a breath of fresh air and in the colours of support for entering new markets, both through integration into multinational supply chains and through export support. These are the themes of two analyses of current RAS programs that might launch in 2025 for SMEs dedicated to expansion. A somewhat different perspective on innovations in terms of employment and social impact is provided by the analysis of the pioneering implementation of the EIB’s social impact loan program. We wrap up the year with an analysis of the third call under IPARD III, which provides support for investments of up to one million euros in physical assets of agricultural holdings.
EIB and UniCredit: Social Impact Loan
// The EIB, in Serbia, in partnership with UniCredit Bank, implemented a social impact financing program, which is the first program of its kind not only locally but also beyond the region’s borders. This innovative 60 million EUR program provided support to small and medium-sized enterprises (SMEs) in Serbia, promoting and encouraging employment, entrepreneurship, and leadership among women, young people, and vulnerable social groups, thereby bringing added value to companies on multiple levels, from strengthening internal capacities to competitiveness in dealings with multinational companies. The incentive was provided through a results-based reward mechanism in the form of a grant. To qualify for the non-refundable incentive funds, companies had to achieve specific, predefined goals related to employment, entrepreneurship, leadership, and professional education.
// The financial reward was provided as a grant within the EIB’s Economic Resilience Initiative (ERI), aimed at fostering new job creation and sustainable growth of the private sector. The program implemented with UniCredit Bank was the EIB’s first loan to the private sector in the Western Balkans under the ERI framework, with the goal of promoting sustainable development. Besides the financial incentive, the program also included technical assistance for participants in the form of connecting and networking socially impactful businesses, as well as training in non-financial reporting and other aspects of generating and measuring social impact.
// Social impact loans enable companies to strengthen their position and differentiate themselves in the market through socially responsible business practices. Organizations that demonstrate a commitment to inclusion and employing vulnerable groups become more attractive to investors, especially those focusing on ESG standards. Furthermore, such a commitment can lead to greater competitiveness in dealings with multinational corporations, public institutions, and international programs, further increasing capacity for growth and innovation. Consumers are also increasingly favouring brands with pronounced social impact, and through hiring and training new staff from vulnerable groups, companies can significantly enhance productivity and workforce stability. Social impact loans, thus, represent a tool that not only addresses current business challenges but also creates a platform for long-term successful and responsible operations. In the first iteration of the program, €60 million was used to finance over 80 domestic companies through loans accompanied by grants, with technical support provided by the program. Based on extremely positive experiences, the continuation of the program in Serbia is expected, along with regional and even global expansion. We eagerly await the next phase, the beginning, results, and effects of which we will follow and analyse here.
IPARD: Up to One Million Euros in Investments in Farm Physical Assets
// The Directorate for Agricultural Payments has announced the third call under IPARD III, continuing within Measure 1 – Investments in Physical Assets of Agricultural Holdings. The subject of this public call includes investments in physical assets and eligible costs related to construction, as well as the procurement of new equipment, machinery, and mechanisation, excluding the purchase of new tractors, and including the establishment of fruit, vegetable, and grape plantations. The call covers the sectors of milk, meat, fruit and vegetables, certain types of cereals and industrial crops, grapes, and eggs. The call’s budget amounts to 1,7 billion dinars, with the level of incentives ranging from 60% to 75% of eligible investment costs. An additional 5% is granted to young farmers, organic producers, holdings in mountainous areas, and investments in waste and wastewater management or renewable energy production. Incentive amounts for the fruit, vegetable, crop, grape, and egg sectors range from 20.000 to 700.000 EUR, while for the milk and meat sectors, they range from 20.00 to 1.000.000 EUR.
The list of eligible costs is clearly defined, enabling farmers to fund improvements and prepare plans for the effective utilisation of funds. In addition to sector-specific costs, eligible expenditures include consultancy services, feasibility studies, environmental impact assessments, and architect and engineering fees. Beyond preparatory activities, the call also supports final or additional elements of comprehensive farm improvements, such as connecting to water and energy networks, constructing internal road networks, or landscaping through construction
works or landscape architecture. Apart from procuring nearly all essential equipment for production and processing cycles in crop farming, poultry, dairy, and livestock farming, the call encompasses construction, craft, and installation works for designing and constructing buildings, installing ventilation and air conditioning systems, fire protection systems, and accompanying energy, water, gas, and sewage systems. The call also includes constructing facilities and procuring equipment for producing electricity and heat from renewable energy sources for own use.
When considered in its entirety, this call presents an exceptional opportunity for farms and producers to fully implement improvements and achieve qualitative and quantitative advances in their operations. An analysis of eligible costs suggests that it is possible to execute a comprehensive package of upgrades across all production and supporting segments. The conditions under which funds are granted, covering up to three-quarters of costs, significantly ease the achievement of goals such as improving efficiency, reducing costs, and consequently increasing competitiveness.
// Beyond providing concrete financial support, the IPARD programme can be viewed as a kind of “accelerator of development” for agricultural holdings—a boost that helps farmers achieve their goals more quickly and easily. IPARD incentives enable farmers to acquire modern equipment and technology, increasing the efficiency, productivity, and competitiveness of their holdings. This opens doors to new markets and business opportunities. At the same time, investing in modernising and improving farms with the support of IPARD incentives increases their overall value. This is especially important for young farmers starting their businesses and those looking to expand or pass their operations on to future generations. These incentives are not just a financial injection but also a catalyst for development, innovation, and sustainability in agriculture. However, the significant funding available for physical asset procurement comes with substantial requirements. In addition to formal documentation, which includes over twenty documents (or more, depending on the purpose), such as property ownership certificates, land registry extracts, balance sheets, or pro forma invoices, applicants are also required to submit a simple or complex business plan, again depending on the purpose and amount. Therefore, the support of experienced advisors in preparing such projects can make the difference between a good attempt and a successful realisation. Our experienced consultants are available for initial diagnostics, assessing project and applicant eligibility, and offering broader support in implementing both IPARD and prior financing.
SDA: Easing Entry into Multinationals’ Supply Chains at the Start of the Year
// The Serbian Development Agency (SDA) launched a new call at the very end of the year for participation in the Support Programme for Enterprises Entering the Supply Chains of Multinational Companies (MNCs). The programme, aimed at micro, small, and medium-sized enterprises (MSMEs), focuses on enhancing the capacities of domestic companies to integrate into global value chains. This call comes at a time when the “nearsourcing” trend of replacing distant suppliers with local and regional ones, remains strong, presenting an exceptional opportunity for Serbian businesses. The fact that the call is issued at the close of the calendar year provides potential beneficiaries with the chance to start the next year by strengthening their capacities for international operations.
The programme’s budget is 180 million dinars, enabling cost reimbursement for various areas of support, including investments in tangible assets, intangible assets, consultancy support, and activities related to establishing cooperation with multinational companies. Eligible business sectors for this year’s programme include the automotive sector, covering the production of devices and components made of plastic, rubber, machinery, and equipment, as well as the production of labels and barcodes for the automotive industry. Also included are the
machinery and equipment sector for other purposes, the metalworking sector, the rubber and plastic sector, the household appliances and parts sector, and the electrical and electronic systems and components sector. Enterprises must have at least five employees and revenues of at least 35 million dinars in 2023. For companies cooperating with MNCs or their suppliers, the minimum revenue requirement is 20 million dinars. The value of fixed assets at the end of 2023 must be at least 35 million dinars or 20 million dinars in the case of cooperation with MNCs.
The programme supports specific activities, including investment in tangible resources such as the purchase and installation of high-performance production and processing equipment, including industrial robots, CNC machines, production lines, and similar equipment, which must not be older than three years. Additionally, it covers costs for equipment used in raw material input control, quality control during production, and final product quality control, as well as the procurement of specific new tools, accessories, robots, or cobots. Investment in intangible assets includes certification according to industry standards specific to global value chains, such as IATF16949, ISO 14001, ISO 45001, and similar standards, as well as the implementation of software solutions for optimising production processes. Moreover, funding is available for prototype or trial production series development, listing on reference interactive supplier platforms, and covering insurance premiums necessary for cooperation with MNCs. Consultancy support includes optimising production and business processes to enhance efficiency, introducing or improving corporate governance, and aligning with ESG standards, including preparing technical documentation and green industry studies. The programme also supports planning the implementation of software solutions, mapping business processes, and preparing for on-site performance reviews by MNC representatives.
// Participation in multinational supply chains provides users with predictable demand, simplifying revenue planning and enabling investments in equipment and fixed assets, as well as the planning and execution of internal enterprise development. Moreover, collaboration with multinational companies offers opportunities for faster or more focused knowledge and technology transfer, tailored to specific needs, further improving the competitiveness of domestic firms. At the same time, support for introducing or improving strategic and operational planning, corporate governance, and human resource management are areas where Glenfield consultants have extensive experience, excellent results, and best practices tailored specifically to the MSME sector. We can fully adapt these services to the unique requirements of applicants. We can fully adapt these services to the unique requirements of applicants. Therefore, to take full advantage of this opportunity provided by the SDA, which significantly offsets investment costs, all that is needed is to reach out for a free assessment and application support.
SDA: Support for Entering New Markets
// Another programme from the Serbian Development Agency (SDA), also launched at the end of the year, thematically and in its goals complements the previous topic of integration into global value chains. This is the Export Promotion Support Programme, which can provide significant assistance and serve as a step toward further internationalisation for domestic enterprises that recognise potential and have suitable products or services for entering foreign markets. The programme aims to increase export revenues for domestic companies by enhancing competitiveness and modernising capacities, focusing on empowering them to enter new markets through a range of specific interventions.
Eligible participants include enterprises from various production sectors, such as the food industry (excluding basic agricultural production), beverage production, metal products, electrical equipment, clothing, rubber and plastic products, and the production of components for motor vehicles and machinery. Criteria for participation include a minimum of 10 employees, export revenues of at least 12 million RSD in 2023, and fixed assets valued at no less than 35 million RSD. Supported measures include
activities such as developing marketing plans, adapting products to the requirements of foreign markets, product certification and homologation, listing in international trade chains and online stores, and independent exhibitions at prestigious international fairs. Additionally, the programme offers the opportunity to procure modern equipment and provides consultancy support to improve export strategies, enabling companies to acquire key knowledge for success in global markets.
// The programme’s budget of 150 million dinars is allocated for funding eligible costs under the specified measures, with a maximum grant amount of up to 10 million dinars per user. The way this support is structured—its purpose, application, and budget—realistically enables users to enhance their production capacity and adapt to the demands of external target markets. Entering new markets with adequate capacity and capability significantly increases prospects for long-term sustainability, while the financial support for this step alleviates the burden on users, allowing internal resources to be utilised for other purposes that further strengthen export orientation. In this context, the Export Promotion Support Programme represents an initiative that empowers enterprises not only for export but also for broader integration into global economic flows. By combining support for capacity building and visibility in foreign markets, this programme further strengthens users in their efforts to achieve sustainability and growth on a sound foundation, making it highly valuable for those looking to reach out of existing boundaries.
| KEY ECONOMIC INDICATORS | Dec - 24 | |
|---|---|---|
| 1 | Annual inflation | 4,30% |
| 2 | Reference interest rate | 5,75% |
| 3 | Unemployment rate | 8,10% |
| 4 | Average net salary - RSD | 98.538 |
| 5 | Average pension - RSD | 45.710 |
| 6 | Exchange rate RSD/EUR | |
| On the last day of the month | 116,9651 | |
| Average exchange rate for the month | 116,9942 | |
| 7 | Exchange rate RSD/USD | |
| On the last day of the month | 110,6681 | |
| Average exchange rate for the month | 109,9682 | |
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