Strategies of the Development of Entrepreneurship and SME

• for unemployed (micro credit)• for entrepreneurs• for those who start a business (start-up loans)• for business promotion and development in the undeveloped regions• Financing of SMEs through the Development Fund in 2006:• Long term credits for SME and entrepreneurs – Euro 99.6 million• Short term credits for craft and service businesses and entrepreneurs Euro 8.6 million s• Start –up credits Euro 25.8 million• Special programs for regional development Euro 42.1 million.Although there is a noticeable increase of interest of business banks for SMEs, terms ofapproval of credits for small and medium companies and entrepreneurs are substantiallyunfavourable. According to the adopted strategy of development of small and middle sizedcompanies and enterprises in the Republic of Serbia, Guarantee fund was established (by theLow on Guarantee fund, Official Gazette, No 55/03) to support the access of domestic smalland medium sized enterprises, entrepreneurs and agriculture producers by guarantying aportion of the loan that is extended by banks to SMEs, and entrepreneurs. The goal of theGuarantee fund is to influence a significant increase in the accessibility of credit, as well aslowering of the interest rate due to the lessening of the financial and commercial risk. Thebusiness and private entrepreneurs qualifying as small and medium sized enterprises inaccordance with the Republic legal provision (the Law on accounting and auditing, OfficialGazette, No 71/02), entrepreneurs and agriculture producers are eligible to apply. Theextended cover of the guarantee can reach up to 90% of the issued bank loan. Enterprises canapply for guarantees in respect to the following different types of loans:• Working capital loans• Complementary working capital loans• Investment and development loans• Entrepreneur's credit lines• Start-up projects etc.In 2006, Dinar credits for economy increased by 20%. The share of short term funds indeadline fund structure of private sector economy is decreasing. Credits to the economy of theprivate sector in GNP for 2006 were 28%.According to National Investment Plan 2006-2011, financial resources for thedevelopment of entrepreneurship, employment and economic growth are provided for:• Industrial zones development and industrial parks (cca 46 million euros for 49programs);• Attracting direct foreign investments (Euro 20 million);• Instigating export (Euro 15 million);• Investments to underdeveloped regions for a balanced regional development (Euro 15million);• Start-up credits for beginners (Euro 7 million);• Self-employment micro credits (Euro 10 million);• Founding of business incubators for entrepreneurial instigation (Euro 3 million for 14programs);• Development of basic infrastructure (Euro 35 million for 33 programs).Within the ENTRANCE – the Program for entrepreneurship, training and services,financed by the Government of Norway, the business incubators are founded in Serbia. Thefirst business incubator was founded in Nis in September 2005. Based on the experiences ofthis pilot business incubator, the incubators were founded in Zrenjanin, Subotica, Rakovica andthe plan is to form another 14 to 16 incubators in Serbia. Founding of business incubators forentrepreneurial instigation Euro 3 million are provided by National Investment Plan 2006-2011.62