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The Government of the Republic of Serbia

In the service of citizens

RSD 1.45 billion for opening SMEs in underdeveloped municipalities

Belgrade, 24 October 2007

State Secretary at the Serbian Ministry of Economy and Regional Development Verica Kalanovic said that the Serbian Development Fund recently approved RSD 1.45 billion for opening small and medium-sized enterprises (SMEs) in 51 underdeveloped municipalities, which should create more than 2,300 jobs.

Kalanovic told a press conference that the total value of the projects for which investors competed in the first phase during July this year was RSD 3.6 billion, which means that investors provided a third of the funds, while two thirds was sought through loans.

She said that the Development Fund currently offers the most favourable loans at an annual interest rate of between 1% and 2%, with a payment period of seven years and a grace period of one year.

In the first phase 58 underdeveloped municipalities competed, and projects approved included 153 projects in 31 most developed municipalities and 73 projects in 20 underdeveloped municipalities, said Kalanovic and recalled that these are SMEs which employ up to 10 employees.

She specified that generally these enterprises deal in food products, wood processing, chemical and textile industry. She added that the highest number of loan applications came from the municipalities of Leskovac, Loznica, Novi Pazar, Knjazevac, Prijepolje and Svrljig.

According to Kalanovic, some 77% of the total approved funds are for expanding existing production which shows the clear intention of investors to remain in underdeveloped areas.

Kalanovic said that according to the 2006 National Investment Plan 49 industrial zones will be opened throughout Serbia, and in underdeveloped municipalities these zones will be state funded, and in developed ones with budgetary and municipal funds.

She said that in nine industrial zones, which are almost complete, factories are already working.

She said that by the end of 2008, complete infrastructure will be installed in 17 industrial zones, and in 23 zones the Ministry of Economy and Regional Development will have to find optimal solutions for further investment and clear property issues with local self-governments.