How to support investment activity in Serbian SMEs

Abstract

Serbian economy during the last three years is in a good shape, with increasing GDP, the increase in industrial production, as well as in trade, construction, traffic, tourism. The Government introduced painful measures in order to consolidate public spending, which produce results stronger and quicker than expected. Also, some important steps forward in market reforms were made, by which Serbia improved its position on the different lists measuring the level of business conditions. Entrepreneurs reacted positively on those encouraging changes by increasing number of newly established companies and shops. Especially important for further development is the increase in competitiveness and productivity. To do so it is necessary to push investments activity up, as it is on the low level, until now. According to entrepreneurs the access to finance is still problematic. The banks are almost the sole supplier of financial sources, which hesitate to cooperate with SME. Other financial institutions which could be helpful are simply missing. The aims of the paper are to illuminate the problem of low investments activity of SME and to address the crucial steps to improve situation.