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The Government of the Republic of Serbia

In the service of citizens

Serbia to continue financing companies in Kosovo-Metohija

Belgrade, 20 February 2008

Serbian Deputy Prime Minister Bozidar Djelic said today that the state will make efforts to help all relevant institutions, including those who help small and medium-sized enterprises (SMEs) in Kosovo-Metohija to continue working unhindered in that part of Serbia’s territory.

Speaking at a meeting of the Serbian Association of Small and Medium-Sized Enterprises held at the Serbian Chamber of Commerce, Djelic said that the Serbian Development Fund will continue financing companies in Kosovo-Metohija, and added that Serbian Minister of Economy and Regional Development Mladjan Dinkic is visiting the province today to present the policies of economic presence in Kosovo-Metohija.

The Serbian Deputy Prime Minister said that Serbia does not recognise the self-declared independence of Kosovo-Metohija therefore its institutions will be present in the southern province.

He said that this year a sum of RSD 5.6 billion has been set aside for Kosovo-Metohija in the Serbian budget, of which RSD 1.3 billion is for projects falling under the National Investment Plan.

The funds are there, and many possibilities as well, and one of the initiatives which will be launched today is the opening of a branch of the Serbian Agency for the Development of Small and Medium-Sized Enterprises and Entrepreneurship in Kosovska-Mitrovica.

Djelic said at the meeting that the government is considering the possibility of making the state a silent partner and minority owner in SMEs, in order to improve their performance.

According to Djelic, there is awareness that these businesses need an injection of capital from €500,000 to €1 million, which cannot be provided without the help of banks.

It was also considered that state policies should be redesigned in order for the state to enter into SMEs as minority owners and silent partners to strengthen them financially, explained Djelic. He added that the companies in question here are mainly those which have the potential to expand but are unable to secure more loans.

He said that taking these steps to increase the capital of enterprises is normal in all countries in transition, and added that Serbian enterprises need this encouragement.

The state has done a lot for the SME sector. In 2008 a sum of RSD 2.2 billion was set aside for issuing start-up loans, and an additional RSD 2 billion for encouraging the development of SMEs in underdeveloped areas, said Djelic.

According to Djelic, two thirds of employees in the industrial sector are employed by SMEs; the contribution of SMEs to GDP is 60% and 40% to overall exports.