Financial System in Rural Serbia

Despite its economic and political importance, the development of the Serbian agricultural sector is still hampered by various constraints. The lack of longer-term finance is considered as one of the major impediments to the further development of the sector. 2-3 Partner banks will be supported agricultural finance, training and capacity building in financial institutions and implementation of Financial Cooperation agricultural credit lines. Major constraints to lending to farmers, agricultural SMEs and agro-industrial companies are: General perception of banks that lending to agricultural businesses is risky; Lack of longer-term refinancing facilities; Lack of appropriate agricultural lending technologies and processes of banks; Inadequate collateral of agricultural SMEs and farmers.   The envisaged project will provide credit lines to 2-3 partner banks of up to EUR 22.0 million and project accompanying measures for the PBs of up to EUR 0.5 million.