Private Briefing November 2024
No. 140 | Year XII
November Private Briefing provides analyses of well-established support programs, such as the standardization support offered by SDA or the Technology Transfer Program of the Innovation Fund. Additionally, we delve into very specific topics, such as pre-financing loans for IPARD projects, whose potential impact might surpass even the considerable financing amounts. Lastly, we present an analysis of several alternative investment funds, whose regulatory framework has now entered its sixth year, marking the completion of the first five-year cycle of non-traditional financing in the local market..
IF: Technology Transfer for Innovative Business
// The Technology Transfer Program, part of the Innovation Fund’s offerings, takes a unique approach to fostering innovative entrepreneurship. Designed for scientific research organizations, its hallmark is the support it provides for the commercialization of technologies through licensing, industrial partnerships, the establishment of startups, and the market introduction of innovative products, both domestically and internationally. This approach enables not only the development of technological solutions but also their integration into the economy through sustainable and competitive business ventures.
// Through the current public call, the opportunities for funding innovative projects have been significantly enhanced, with the maximum grant amount per project now raised to six million dinars. This change represents a crucial step toward strengthening the technological base and encouraging the commercialization of research outcomes, as it covers up to 100% of total project costs. Alongside funding, researchers are also provided with mentoring support that addresses key aspects of commercialization, such as intellectual property rights protection, enhancement of technical and market readiness, business model definition, and market placement of innovations. The program is open to scientific research projects at Technology Readiness Level 4 (TRL 4) or higher, indicating that the technology has already been validated in a laboratory setting. Additionally, all issues related to ownership of the resulting intellectual property must be resolved, ensuring legal security and clarity for future commercialization, which also makes the projects more attractive to potential industrial partners, whether domestic or international.
// While all aspects of support offered by the program are noteworthy, the assistance in defining business models and strategies for market placement of innovations stands out among the non-financial elements. The step, or series of steps between product development and a successful business venture often represents the key to successful commercialization. This is frequently a stumbling block not only for innovative ideas emerging from scientific research but also for traditional business initiatives developed directly within the business environment. By increasing the available funding amount, the Innovation Fund continues to build a robust foundation for the development of technological innovations in Serbia, enabling researchers and businesses to overcome barriers to funding and commercialization. In this context, the Technology Transfer Program not only accelerates the path from idea to market but also strengthens the entire innovation ecosystem. It is an essential step toward establishing a competitive, knowledge-based economy and deserves every commendation.
SDA: Driving Competitiveness Through Standardization
// The Serbian Development Agency (SDA), in cooperation with the Ministry of Economy, has launched a new call for the Program to Support the Improvement of Product and Service Safety and Quality. The primary objective of this Program is to enhance the competitiveness, safety, and quality of products and services on the market, thereby facilitating market access and boosting the competitiveness of micro, small, and medium-sized enterprises (MSMEs) and entrepreneurs. Eligible applicants include businesses and entrepreneurs that have been operational for over two years, are not in financial distress per the Decree on State Aid Rules, and have not utilized other state or local incentives for the same purpose. Furthermore, applicants must operate in the fields of manufacturing, processing, or IT services.
The Program supports activities aimed at improving and standardizing business operations. This includes procedures for product conformity assessment with Serbian and international technical regulations, such as certification, product testing, and achieving compliance with prescribed marks such as CE, 3A, eco-labels, OEKO-TEX Standard 100, among others. It also covers the safety evaluation of cosmetic products and the preparation of safety reports. One significant area of support involves voluntary conformity assessments with Serbian standards.
Additionally, the Program backs the implementation and certification of internationally recognized management system standards. This encompasses the preparation, implementation, initial certification, recertification, and regular supervisory audits of management systems in areas such as quality, environmental protection, food safety, and more. Accreditation of conformity assessment bodies is also included, covering both initial accreditation and renewals under schemes such as biobanking or validation according to SRPS EN ISO standards.
Funding for these activities is provided through reimbursement or co-financing. Micro and small enterprises, as well as entrepreneurs, are eligible for up to 60% reimbursement of eligible costs, while medium-sized enterprises can receive up to 40%. The maximum amount that an individual beneficiary can receive is one million dinars, except for the conformity assessment of Class III medical devices, where the maximum amount is 1.5 million dinars. For accreditation costs, the maximum allocated amount is 300,000 dinars. The minimum refund amount is 100,000 dinars, while the total program budget is 90 million dinars. The deadline for completing all activities is 12 months from the date of signing the contract, except for medical device conformity assessments, where the deadline is 18 months. Notably, the Program also funds activities already underway, provided they started after July 1, 2024, and were not completed before the call’s announcement.
// The Program’s primary goal is to enable beneficiaries to significantly expand their potential markets by improving competitiveness, safety, and product quality. By introducing internationally recognized standards and quality certifications, businesses can reduce operating costs through standardization and strengthen their positions in both domestic and international markets, thereby increasing sales and revenues. Product quality and compliance with technical standards represent crucial competitive factors and, in some cases, mandatory requirements for entering many foreign markets. The cost and complexity of the certification process often serve as a deterrent for businesses, especially in the micro and small enterprise sector. For this reason, programs like this, which provide financial support and ease the burden of compliance with standards, play a key role in enabling domestic businesses to improve their products and services, expand their operations, and ensure sustainable growth. In addition to increasing sales and productivity, certification and standardization contribute to building trust among consumers and business partners, reducing operational risks, and facilitating access to supply chains and supplier networks. In a constantly growing competitive environment, these factors can mean the difference between success and stagnation. Through the support provided by this Program, businesses can overcome barriers that might otherwise limit their growth and development.
Alternative Investment Funds – Five Years of a New Support Model for MSMEs
// In this edition of Private Briefing, alongside analyses of traditional or standard models and programs supporting agriculture and business, we delve into how the financing model through investment funds is implemented in the local market, enabled by the adoption of the Law on Alternative Investment Funds. At the end of 2019, the Serbian government opened the doors to diversifying funding sources and including users who previously lacked access to adequate financial resources. The initiative was assumed to be particularly significant for micro, small, and medium-sized enterprises (MSMEs), helping them bypass the limitations of traditional financing for new businesses or innovative ideas, while also unlocking opportunities to expand knowledge and enhance competitiveness in domestic and regional markets. After five years, three funds stand out as sources of support for MSMEs: DSI Business Angel Network, ICT Hub Venture, and TS Ventures Fund. Each of these funds has unique characteristics and offers distinct advantages to entrepreneurs and companies at different stages of development.
DSI Business Angel Network, active since spring 2021, focuses on supporting startups in their early stages of development through the “smart money” concept. This means that, in addition to financial injections ranging from €50,000 to €200,000, startups receive mentoring support, expertise, and access to global contacts. This network is particularly suitable for startups that already have an initial product (MVP) or proven market traction. For MSMEs in Serbia, DSI represents an opportunity not only to secure funds with the help of investors but also to develop competencies and strategies necessary for scaling their operations to new markets. Mentorship support helps startups prepare for subsequent funding rounds and increases their chances of long-term success.
ICT Hub Venture is Serbia’s first private venture capital fund, established in 2017. The fund focuses on tech startups in the region that are in their early development stages. In addition to direct funding, it supports company growth, talent acquisition, and connections with global funds for additional capital.
For MSMEs in Serbia, ICT Hub Venture is a key partner for tech-oriented projects with global growth potential. Direct funding accelerates product development, while the network of contacts and team-building support helps companies overcome challenges during the critical phases of their business. Connecting with global funds further enhances visibility and opens doors to new investment opportunities.
TS Ventures Fund supports innovative technological solutions in their early stages of development, including pre-seed and seed phases. This fund focuses on projects with the potential for rapid market transformations. For MSMEs, TS Ventures represents a valuable source of funding for riskier yet highly innovative projects, recognizing the potential of ideas that can bring significant changes and providing entrepreneurs with opportunities to advance quickly with appropriate support. In addition to funding, the fund contributes to building an innovative business culture in Serbia and expanding the technological ecosystem.
// All three funds represent diverse but complementary sources of financing for MSMEs in Serbia. While DSI offers personalized mentorship and connects entrepreneurs with global contacts, ICT Hub Venture enables tech start-ups to position themselves globally through direct funding and strategic support. TS Ventures Fund, on the other hand, encourages especially innovative projects and offers opportunities for rapid market transformation. For MSMEs, these funds are not just sources of capital but also key partners for growth and success in an increasingly demanding business environment. These funds provide not only financial support but also expertise and access to global networks, contributing to increased competitiveness both domestically and internationally. Considering that access to adequate funding remains one of the biggest challenges entrepreneurs face, these funds represent both a resource and an indicator of possible ways to accelerate development, increase productivity, and create sustainable companies. Monitoring their impact on Serbia’s economic ecosystem will undoubtedly be a topic for future analyses as new investments are realized.
DFV: Pre-financing Support for IPARD Projects
// The Development Fund of Vojvodina (DFV) has announced a call for pre-financing loans to support the implementation of projects approved and funded through the IPARD program. While IPARD, as the most significant support program for farmers and the processing industry, provides substantial grant funding, the condition for disbursement is the prior realization of the investment project, which includes financing its full value before grant verification and approval. Given the general lack of suitable and tailored financing options in this segment, especially for fixed assets, and the noticeable absence of true IPARD pre-financing solutions, this targeted financial support for IPARD projects is a critical aid for farmers and processors.
Eligible applicants must be located within the territory of the Autonomous Province of Vojvodina, where the investment subject to financing must also take place. Potential loan beneficiaries can apply for funds after submitting their request for IPARD project approval, but they do not need to wait for the project’s formal approval to apply for an DFV loan as a “supplement.” Loans align with the purposes of IPARD incentives, covering amounts up to 150.000 EUR for approved projects for purchasing agricultural machinery and equipment, or up to 800.000 EUR for investments in facilities and equipment. A broad range of
collateral is acceptable, including pledges on purchased equipment, guarantees, mortgages on buildings or land, and bank guarantees. Interest rates range from 1% to 2%, depending on the municipality’s development level and the provided collateral. Loans are euro-indexed, with terms of up to 7 years, including a grace period of up to 2 years. Repayment can be monthly, quarterly, or semi-annual. Once the IPARD grant is disbursed by the Directorate for Agrarian Payments, the Fund recalculates the loan principal, reducing it by the grant amount, leaving the beneficiary obligated to repay only the portion of the loan not covered by the grant.
// Pre-financing until the grant disbursement poses a significant obstacle for farmers seeking to improve their competitiveness through investments in facilities, equipment, and other fixed assets under IPARD. On the other hand, while access to financing through these loans has been greatly simplified, as with any financing, it is crucial to assess existing resources accurately, secure adequate market evaluations, and prepare a business plan that clearly outlines the financial and business impact of the loan and the grant. Professional support, from applying for IPARD funds to submitting the loan request to the Fund, based on the expertise and experience of consultants, can be the decisive factor that separates accepted from rejected applications.
| KEY ECONOMIC INDICATORS | Nov - 24 | |
|---|---|---|
| 1 | Annual inflation | 4,50% |
| 2 | Reference interest rate | 5,75% |
| 3 | Unemployment rate | 8,10% |
| 4 | Average net salary - RSD | 96.115 |
| 5 | Average pension - RSD | 45.719 |
| 6 | Exchange rate RSD/EUR | |
| On the last day of the month | 117,0266 | |
| Average exchange rate for the month | 117,0336 | |
| 7 | Exchange rate RSD/USD | |
| On the last day of the month | 107,8189 | |
| Average exchange rate for the month | 107,3037 | |
Private Briefing Archive
Current, as well ast the previous editions of Private Briefing in .pdf format are available here.
For additional information or questions, please contact us. Share your impressions, inquiries and news, or share the updates on the current projects.
Exclusive opportunity for capacity strengthening – Register at Glenfield E-Learning!
Glenfield Training and Consulting Doo | +381 11 407 9066 | office@glenfield.rs | www.glenfield.rs
Disclaimer: this report was prepared and published under the authority of Glenfield Training and Consulting Ltd. and is used only for informational purposes. Information that is used, have been obtained from sources that Glenfield Training and Consulting Ltd. believes to be reliable, but no guarantees their accuracy and completeness. None of the information or the proposal cannot be construed as an offer or solicitation to buy or sell. No part of this publication may be reproduced without written permission Glenfield Training and Consulting Ltd.