Serbian banks have yet to decide whether they will approve housing loans for young people, despite the government’s recent adoption of a bill designed to provide state-subsidized loans. The new loan program is expected to cost up to 400 million euros, the amount the government plans to allocate in support.
Banks have expressed concerns about the details of the program, particularly the risks involved. One bank representative told Nova Ekonomija that while the draft of the law has been reviewed, no official document has been presented yet. They emphasized that banks have the right to refuse to provide this type of service, even though the government has proposed the initiative.
So far, only two banks, Poštanska štedionica and Banka Inteza, have agreed to offer these loans. The loans are available to Serbian citizens between the ages of 20 and 35, including those who are employed for an indefinite period, temporary workers, farmers, entrepreneurs, independent artists, and even unemployed individuals—though the latter will need a family member as a guarantor.
The main concern for banks is the higher risk involved in lending to these groups, particularly the unemployed. Many banks are hesitant to approve loans for this category, as the risk is deemed higher compared to conventional credit. One bank representative stated that their institution would not approve loans for the unemployed, regardless of the guarantee, although other banks might be more open to offering these loans.
The law includes provisions for the Serbian government to issue guarantees to banks, covering up to 40% of the loan amount during the first 10 years of repayment. However, bankers have pointed out that this guarantee is quite limited, covering only a small portion of the loan. Additionally, there is concern over the long-term financial implications, as the outstanding principal of the loan may not significantly reduce after 10 years of repayment.
In order to qualify for these loans, applicants must not have previously owned residential real estate or be the beneficiary of any housing loan in Serbia. The law also specifies that the state will allocate the necessary funds from the budget to fulfill its obligations related to these guarantees.
The law is expected to be implemented starting March 1 of this year, but it remains unclear how the government will fund the initiative amid tight fiscal policy and other financial commitments, including salary increases for teachers and payments related to Serbia’s ownership in NIS.
While some banks are still reviewing the proposal, it remains to be seen whether the program will effectively support young people in securing affordable housing.
