Micro and small family businesses, along with entrepreneurs in Serbia, have until June 30th to apply for state grants covering 50 percent of investments in the production and processing of goods. The government has allocated 400 million dinars for this initiative, offering up to two million dinars per project. According to economics professor Milorad Filipović, this financial support can serve as a significant opportunity for growth and development. However, he stresses that small businesses also require better protection of property rights and contracts to fully thrive.
Companies with up to 50 employees make up a crucial part of the Serbian economy. The state’s grant of up to 17,000 euros can be an excellent catalyst for businesses with strong plans and strategic placement, Filipović explains. However, he points out that only about 24 percent of these small businesses are involved in production and processing, with the majority operating in retail, services, and other sectors.
“Although 17,000 euros might seem modest from an investment standpoint, I advise any business with development potential to take advantage of this opportunity. One of Serbia’s weakest points is that micro and small businesses often remain at the same level for years, without progressing into medium-sized businesses,” Filipović says.
When asked about the main barriers preventing small businesses from growing, Filipović identifies systemic issues as the key obstacle. He highlights a certain level of distrust in the system, as many family business owners are uncertain about the future stability of the economic environment over the next few years.
“There is a need for a stable system, strong protection of property rights and contracts, and a well-functioning judicial system. In many cases, there are infringements of property rights and contracts, leading to failed investments. Unfortunately, the application of legal procedures can sometimes be selective,” says Filipović.
He emphasizes that micro, small, and medium-sized enterprises (SMEs) make up 99 percent of Serbia’s domestic economy, with around 360,000 such businesses employing 63 percent of the workforce. These businesses also contribute nearly 60 percent to the country’s gross domestic product.
Filipović believes that small businesses face significant disadvantages compared to larger investors, particularly because many large companies exploit their dominant market positions. He urges for systemic reforms that would provide more equal opportunities for small businesses to thrive.
