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Representatives of the Belgian-Serbian Business Associatin attended  the SMEs 2019 Conference „Power to SMEs – How to energize and grow your business” which took place at the Metropol Palace Hotel in Belgrade on Tuesday, May 14, 2019.

The conference was opened by Symeon G. Tsomokos, CEO, TGI Group International, Mr. Nenad Popovic, Minister without portfolio for Inovation and Technological Development of Serbia and Mr. Dejan Ilic, President of Managing Board, Innovation Fund.

Mr. Popovic emphasized that the future lies in the small and medium-sized enterprises, and that the state is trying to encourage and help educated young people to start their own businesses and startup companies and thus start an innovation and technological process that will surely have a positive impact on the future of both their home city and Serbia. That is why, he added, the whole Europe has been working on different SME Technology Development Programs with the goal of improving the SME competitiveness.

Mr. Ilic noted that the Serbian market is still open and unstructured, and that the present moment is an ideal opportunity for conquering the market, instead of leaving Serbia.

The first panel – The Future of SME’s: How to secure Financing and how to smoothen the Path into new Ventures was moderated by Mr. Dragan Loncar, Professor at the Faculty of Economics in Belgrade. Mr. Loncar opened the panel stating that access to finance for SMEs is crucial not only for their development, but also for the development of the entire Serbian economy. He also mentioned the importance of reducing the supply and demand gaps in SME financing in Serbia, noting that on the latest Doing Business List Serbia has dropped to 48th place in terms of the ease of doing business, in comparison to 2017, when the country ranked 43rd.

Ms. Dubravka Negre, Head of the EIB Regional Representation for the Western Balkans, as the first panelist, started by presenting several studies conducted by the EIB and regarding SMEs as the backbone of the Serbian economy and any economy in today’s world. The SME sector in Serbia generates around 75% of employment, while 96% of enterprises in Serbia are micro-businesses with 1-10 employees. Ms. Negre pointed out that the main question is what lies behind the fact that the SMEs, especially startups, in Serbia consider access to finance to be a more significant obstacle compared to large companies. One of the reasons, she added, is the lack of venture capital scene in Serbia as well as the fact that the demand for small loans (up to 50,000 EUR) is high and yet the supply of loan financing to SMEs is insufficient as the banks mainly avoid financing new and risky enterprises. In Serbia only, the EIB has financed SME projects with over EUR 1,5bn sustaining around 300,000 jobs.

Ms. Katarina Obradovic Jovanovic, Assistant Minister, Ministrz of Economy of Serbia noted the importance of the Strategy to Support Development of SMEs, Entrepreneurship and Competitiveness for the Period 2015–2020, and its particular importance for start-ups. The strategy is aimed at improving the business climate, providing better access to sources of financing, continued development of human resources and strengthening the sustainability and competitiveness of SMEs.

Honorary president of the Serbian Association of Employers, Mr. Nebojsa Atanackovic started by raising a question – does the successful financing guarantee the company’s success? He noted that it does not as there are many other problems that particularly SMEs in Serbia are facing. The trend of more companies being closed than founded has, however, being reduced by various government measures and significant incentives for “beginners in business”.

Ms. Lorena Macura, SEAF, briefly presented  the concept of alternative financing in Serbia (Crowd funding, Peer-to-peer lending…) as well as SEAF – an investment management group providing growth capital and business assistance to SMEs (at the moment investing mainly in agribusiness, IT, retail food, health care etc.)

Ms. Sanja Popovic Pantic, President of the Association of Business Women in Serbia, started her presentation referring to the topic from the perspective of female entrepreneurship and the legal and regulatory framework for microfinance in Serbia, since most women-owned enterprises are micro enterprises. She expressed her hope that a meeting with the Ministry of Finance, scheduled a day after the conference, concerning the new law on microfinance would be successful. She emphasized the importance of the law enabling all the companies which are below the radar of commercial banks to get the necessary funds under more favorable conditions.

The participants closed the panel by summarizing some of the most important topic-related proposals – income tax credits, providing consulting support, stimulating the development of the financial sector, dialogue with the government, and linking scientific research and economic growth.

The second panel – The new playgrounds of Entrepreneurship: Start-ups and Innovators, was moderated by Mr. Kemal H. Balihodzic, Founder and CEO @UpTrend Marketing Solutions.

Ms. Slobodanka Dzinovic-Kojic, Head of Entrepreneurship Office, Serbian Chamber of Commerce presented briefly some domestic public sources of finance and domestic public financial instruments (2016 Government Program “Year of entrepreneurship in Serbia”, a package of state programs: financial and nonfinancial support; in 2017, the program has grown into the “Decade of Entrepreneurship”, with the Government and the Ministry of Economy continuing to systematically support the SME sector). She also reminded the participants about various free workshops for SMEs that have been organised by the Serbian Chamber of Commerce, aimed at providing free training and advice to SMEs in all sectors.

Mr. Zoran Martinovic, National Employment Service Director, stated that the unemployment rate in 2019 is 9% lower compared with the percentage from the same period one year ago. Martinovic pointed out that the unemployment rate in Serbia is constantly decreasing and that promoting and encouraging entrepreneurship is an important way of reducing unemployment.

Mr. Aleksandar Medjedovic, Board member of the Turkish-German Chamber of Commerce and Industry reviewed the start-up and innovation topic from an individual’s point of view, whose primary goal is making profit. In Germany, education is considered an essential ingredient for successful entrepreneurship. He noted that the role of the state in the German start-up ecosystem is completely different from the one in Serbia.

He also advised a thorough research and careful consideration before opting for any of the private startup support mechanisms (boot camps, incubators, accelerators etc.) in order to choose a mechanism or program that will help the start-up grow in the right way.

At the end of the first panel participants were asked to share their key ideas for securing the financing of SME’s.

Ms. Sanja Popovic Pantic stated that the most realistic solution would be enabling tax credit that could be used when it comes to investing into the equipment and real estate for the purpose of company development.

Ms. Lorena Macura mentioned free consulting in order to prepare the documents needed for the applications in order to acquire funding.

Mr. Nebojsa Atanackovic agreed with Sanja Popovic Pantic and also pointed out the importance of tax credit for businessmen as it acts as a strong incentive.

Ms. Katarina Obradovic emphasized the importance of the development of oligopoly and other financial institutions which would stimulate the development of financial market.

Ms. Dubravka Negre added that efforts need to be made in order to create the dialogue between the government, the economy and the financial sector. She also stated that we should create a space for the alternative ways of financing and establish a link between science and economy in order for Serbia to become a fast-growing economy.

At the end of the second panel participants were asked to give one piece of advice aimed towards young people who are wanting to become entrepreneurs.

Mr. Aleksandar Medjedovic stated that he would advise young people to become entrepreneurs in the fields of production and new and innovative technologies, as they are the most promising in the future of Serbia, in his opinion.

Mr. Zoran Martinovic noted that the most important thing a young person could do is to work on improving their knowledge and skills and utilize incentives and subsidies as well as monitor the competition on the market.

Mr. Veselin Dragicevic highlighted the importance of the development of start-up community and the utilization of services provided by development agencies.

Ms. Slobodanka Dzinovic-Kojic accentuated the importance of education and training as well as creating a positive economic environment for the first three years of operation – during the most vulnerable period of every company.