SMEs are particularly exposed to rising economic and environmental pressures, including climate risks, shifting trade dynamics, and the wider transition to a green economy. This cluster evaluates policies that strengthen SME resilience and competitiveness in this context. It examines five broader areas, assessing frameworks for SME greening, disaster resilience mechanisms, access to financial support, non-financial support and the role of business networks, as well as innovation ecosystems in supporting the transition.
SME Policy Index for Western Balkans and Türkiye 2026 – Economy Profile for Serbia
Abstract
Over recent years, the interest and readiness of small and medium-sized enterprises (SMEs) in Serbia to operate in the green economy have grown, with 40% of SMEs currently offering or planning to offer green products within the next two years (Ministry of Economy, 2025[1]). However, small businesses still face significant barriers to building resilience in the green transition, including limited awareness, scarce resources and complex regulations.
Since 2022, the ongoing energy crisis and surging global market volatility have also revealed that other market trends accentuate these challenges. In addition to the green transition, the megatrends include accelerated shifts in geopolitics and trading systems, changing consumer preferences, and the rise of the digital economy (OECD, 2023[2]). These dynamics complicate long-term investments in greener practices that could improve efficiency and reduce compliance costs amid tightening environmental standards, a dynamic that is particularly relevant as Serbia faces the implications of the EU Green Deal legislation in the context of its accession ambitions.
This section will therefore shed light on government policies that focus on enhancing SME agility and adaptability in the decarbonisation-trade nexus, which are key conditions for building resilience and securing sustainable growth in increasingly dynamic market environments.
3.1.1. Smoothing SME pathways to a green economy
SMEs play a prominent role in advancing the green economy in Serbia. Yet, businesses still face many structural barriers to decarbonising their activities, such as a high dependence on relatively cheap fossil power supplies, accompanied by increasing price pressure on this key production input. Effectively, SMEs in Serbia saw electricity prices climb by an average of 60%1 between 2019 and 2024 (vs. 25% across Western Balkan and Türkiye [WBT] economies and 91% in the European Union) (Eurostat, 2025[3]), directly impacting their business resilience prospects.2
In 2024, an estimated 77% of SMEs in Serbia took at least one measure to improve resource efficiency or circularity, compared to 93% in the European Union (European Commission, 2024[4]). Around 24% of SMEs in Serbia also offer green products and services (European Commission, 2024[4]), but their market promotion, for example, using ecolabels, remains extremely limited. In 2023, only 2 companies economy-wide used the national ecolabel (since 2009), compared to around 80 000 in the European Union actively leveraging the EU Ecolabel as a tool to market their environmentally friendly products more easily (NALED, 2023[5]). Instead of voluntary labels, companies, particularly exporters, tend to rely more heavily on sector-specific environmental or quality certifications that support market access and regulatory compliance, such as ISO 14001 for environmental management systems.
Positively, key policies governing private-sector development, such as the Strategy for the Development of SMEs, Entrepreneurship and Competitiveness 2023-2027, the Industrial Policy Strategy 2021-2030 and the Smart Specialisation Strategy 2020-2027, are recognising these challenges and have mainstreamed greening and resilience-enhancing measures targeted at SMEs (see Table 3.1). More directly greening-related strategies, such as the Low Carbon Development Strategy 2023-2030, the Draft Energy Sector Development Strategy 2040, the Circular Economy Development Programme 2022-2024 and the Climate Change Adaptation Programme 2023-2030, also outline key activities related to supporting SMEs in their net-zero ambitions while prioritising sustainable and robust business models. Lastly, Serbia’s Reform Agenda constitutes a complementary policy document aligned with these strategies and is particularly important for securing investments that can bring the economy closer to integration with the EU Single Market and sustainability standards.
Notes: “Indirectly” refers to the private sector being considered in the policy document, but no concrete SME-targeted measures are included.
1. An Action Plan 2025-2027 was being prepared at the time of writing, initially expected to be adopted by the end of March 2026.
Source: Information provided by the Serbian government during the assessment period in 2025.
Some progress could be observed over recent years, with value added in real terms in the environmental economy estimated to have increased by 12% from 2019 to 2022, largely driven by agriculture, though the SME contribution is unclear (Eurostat, 2025[6]). Although Serbia starts from a relatively low base, with environmental goods and services accounting for only 0.75% of gross domestic product (GDP), compared to 1.29% in North Macedonia, 2.01% in Türkiye, and 3.33% in the European Union (Eurostat, 2025[6]), the economy could capitalise on this trend by targeting support to SMEs in the primary sector, aligning with Smart Specialisation Strategy (S3) priorities and leveraging new financing opportunities, such as the European Bank for Reconstruction and Development (EBRD)’s SME Go Green programme launched in late 2024.3 This would enhance resilience, as agriculture is among the sectors most vulnerable to climate change, according to the Climate Change Adaptation Programme. Additionally, it could boost the slow adoption of adaptation measures among SMEs so far. Notably, the climate change adaptation strategy does not yet sufficiently reflect SME-specific needs. If unaddressed, this could lead to a widening of the resilience gap and threaten the competitiveness of local economies, especially those in climate-vulnerable sectors (see Section 3.2).
To further support Serbia’s SMEs in the green transition, the government is undertaking a range of initiatives. Some key achievements can be noted in SME-specific activities outlined in the SME Strategy, which are boosting business sustainability and resilience. In this regard, by the end of 2024, the government had developed the Roadmap for a Green Economy in Serbia, including situational analyses of SME challenges to the green transformation across key sectors, based on surveys of more than 350 SMEs. The roadmap’s results include targeted recommendations4 to boost SME support relevant to green growth and resilience, which could usefully inform the draft Just Transition Plan. However, some proposed measures lack specificity and would benefit from further refinement. Moreover, the exact share of government and donor budgets mobilised towards SME-targeted greening measures since 2022, as outlined in the strategies above, is unclear. For some strategies, such as the Low Carbon Development Strategy, the government reported that the budget has not reached a satisfactory level to attain objectives.
Other activities related to industrial symbiosis efforts in industrial zones and translation of International Organization for Standardization (ISO) standards, as well as environmental, social and governance (ESG) trainings, were also completed between 2023 and 2024, though with limited scope. This is also the case for government-funded programmes, such as the Equipment Procurement Programme, through which 35 requests for equipment to improve energy efficiency in the processing industry were approved in 2024, though the average amount from the dispersed funds (total of RSD 194 746 653 [Serbian dinars]) is around EUR 50 000 for each SME, therefore providing a good base for an SME to save energy and reduce its power bills. If such programmes were to scale up, or other planned initiatives to provide better financing options for SMEs take effect (see Section 3.3), more SMEs could boost their sustainability and resilience by capturing their potential for energy savings (IEA, 2022[7]).
Other ways in which the government intends to help SMEs participate actively in the green economy include deploying regulatory instruments that follow the “think small first” principle. The Renewable Energy Law, for example, was amended in April 2023 to streamline access to renewable energy auctions and simplify permitting for small-scale producers and SMEs. This is particularly relevant because small businesses without specialised administrative capacity that invest in renewable energy projects usually face significant procedural hurdles, such as long waiting times for permits and grid connection. Additionally, a digital one-stop-shop for licensing energy projects and environmental impact assessments was created,5 though it remains focussed on streamlining processes for large-scale projects.
While these are commendable steps towards reducing the administrative and regulatory burden for SMEs, many small businesses and entrepreneurs still report difficulty navigating complex environmental regulations, achieving compliance or reconciling business objectives with sustainability principles (Ministry of Economy, 2025[1]). In this regard, it is notable that other incentive tools, such as promoting the use of environmental management systems among SMEs, which tend to be relatively expensive for SMEs, are only implemented to a limited extent in Serbia.
The Development Agency of Serbia (RAS) co-finances industrial certification and standardisation programmes, including environmentally relevant ones, although no data are available on their scope or uptake. Other support mechanisms are largely donor-funded or highly targeted, such as the now-terminated United States Agency for International Development (USAID) Big Small Businesses project, which provided partial funding for certification, or a 2023 initiative by the Institute for Standardization of Serbia (ISS) and the Association of Business Women of Serbia, which supported four women-led businesses in the ISO 14001 certification process (Institute for Standardization of Serbia, 2024[8]).
3.1.2. Boosting SME competitiveness in sustainable value chains
SMEs in Serbia, both export-oriented and domestically focussed, are increasingly recognising the strategic value of complying with environmental regulations, according to a 2025 government study (Ministry of Economy, 2025[1]). While domestic firms tend to pursue green practices primarily for cost savings, exporters also aim to strengthen their position in international green markets. By helping SMEs integrate more easily into sustainable value chains, the Serbian government can support these goals, effectively enhance resilience, and secure a competitive edge for sustainable businesses.
One powerful lever to foster SME participation in sustainable value chains is green public procurement (GPP). By creating consistent demand for environmentally friendly products and services and promoting SME participation in GPP, the government can reduce investment uncertainty for SMEs and improve the business case for greener production. Serbia has taken decisive steps in this direction through the 2023 amendments to the Public Procurement Law, which introduce environmental protection as a guiding principle. However, GPP principles have thus far only been applied on a voluntary or pilot basis. The Public Procurement Office’s Rulebook defining priority categories of goods, services and works only entered into force on 1 January 2026. While SMEs offering greener or higher-quality solutions can win tenders even with higher bids, the current framework does not actively support greater SME participation in procurement processes.
Together with GPP, which targets domestic demand, growing international market pressures are encouraging SMEs to adopt greener practices. In fact, for many SMEs in Serbia, it is their connection to competitive international markets, where buyers increasingly demand compliance with environmental standards and reporting practices, that most strongly drives integration into sustainable value chains. As trade and environmental requirements become more intertwined, export promotion has emerged as a strategic area for government intervention to support SME competitiveness both abroad and domestically. The latest export promotion programme continues to prioritise the same sectors identified in the previous OECD assessment. However, new initiatives are being planned to strengthen the export capacities of the food and beverage industry, though notably, without an explicit link to sustainability or green value chains.
At the same time, Serbia’s strong export growth over recent years presents a strategic opportunity to leverage decarbonisation to foster resilient economic growth and position domestic firms in emerging green markets. This potential is particularly evident in the automotive sector, which has demonstrated robust capacity for export diversification (AC Serbia, 2025[9]). New investments and innovations, especially in digital and low-carbon technologies, would be instrumental in driving sustainable mobility. Encouragingly, Serbia already boasts a robust Automotive and Mobility Cluster, with SMEs making up 80% of its members. However, a critical gap remains: the government does not provide targeted support to establish or strengthen such strategic partnerships that could deepen collaboration among businesses, research institutions and international stakeholders in this or other sectors. Such partnerships, though, would be essential to enhancing the competitiveness and agility of SMEs in transitioning to a greener economy (see more under Section 3.4.2).
Since the last OECD assessment in 2022, the RAS has implemented two SME-focussed programmes aiming to boost their competitiveness in sustainable value chains. The Programme of Support for Companies to Enter the Supply Chains of Multinational Companies ran in 2023 and 2024, supporting SMEs with covering costs related to complying with green industry product and technical standards. The Support Programme for Companies to Adopt Business Principles in International Value Chains was introduced in 2023 and continued in 2024. It provides similar support, with additional reimbursement for consulting on ESG-related rules, procedures and reporting (see more details in Section 3.4.2). However, Serbia’s programme for Supporting Companies in Export Promotion does not have a green-economy focus.
These government initiatives align with a broader trend of nearshoring, as multinational companies seek to relocate production closer to end markets, particularly the EU Single Market (WIIW and WB6CIF, 2024[10]). This shift is especially pronounced in Serbia's renewable energy sector, where demand for local, compliant suppliers is rising (WIIW and WB6CIF, 2024[10]). However, to fully leverage the co-benefits of nearshoring and decarbonisation, such as improved market attractiveness and supply chain resilience, Serbia’s SMEs must be better informed, equipped and empowered to collaborate effectively with international partners.
Importantly, despite the European Union’s Carbon Border Adjustment Mechanism’s (CBAM) imminent implications, in 2024, 72% of SMEs in Serbia were still unaware of its existence, leaving them unprepared for compliance demands that would represent a major supply chain disruption upon its introduction (WIIW and WB6CIF, 2024[10]). This is a growing concern given that 70% of Serbia’s CBAM-covered exports are destined for the European Union, exposing energy-intensive industries to substantial regulatory and market risk (NALED, 2025[11]).
While the European Union’s Single Market Programme offers funding opportunities for SME capacity building, Serbia’s businesses currently lack tailored government support to develop competitive proposals. Although firms can seek general guidance through the Enterprise Europe Network, targeted, sector-specific assistance remains limited. Recognising this gap, the government has taken initial steps to build more structured support mechanisms. It issued practical guidance for SMEs on environmental compliance and sustainable business practices. More concretely, the establishment of the Responsible Business Hub marks progress by offering companies resources on green transition impacts along value chains (see Box 3.1). Additionally, in 2024, 124 SMEs received training on carbon footprint calculation in line with international standards, an encouraging development, though far from the scale required to ensure systemic readiness.
The Responsible Business Hub (RBH) was established by the Chamber of Commerce and Industry of Serbia (CCIS), with support and financing from Gesellschaft für Internationale Zusammenarbeit GmbH (GIZ) Serbia, and was officially launched in April 2023. It is the Chamber's most important institutional point of contact, integrating social and environmental aspects of the green transition.
Policy context
The RBH was established to improve companies' ability to understand and prepare for the new sustainability standards under the Due Diligence in Supply Chains Act. It strives to improve the competitiveness, sustainability and capacity of Serbia’s exporters, particularly in connection to the objectives of the green agenda.
Operational aspects
The RBH is a free support service. A trained team of consultants (financed by GIZ) offers support and advice to companies confidentially and individually, on conducting human rights due diligence and helping to make their business operations environmentally and socially responsible. Most of its activities are connected to the objectives of the green agenda and to educating companies on carbon accounting, CBAM, energy efficiency, energy audits and similar topics.
Policy impact
Through a pilot project, around 40 companies received free corporate carbon footprint reports from consultants who were trained through the RBH programmes.
Guidance and training were offered on dealing with the implications of key EU Green Deal legislation that could (indirectly) affect SMEs through value chains, such as:
Human Rights and Environmental Due Diligence
Corporate Sustainability Due Diligence Directive
German Due Diligence Act in Supply Chain
Carbon Border Adjustment Mechanism.
Provision of a free self-assessment tool called the SME Compass that helps businesses navigate due diligence processes concerning human rights and sustainability standards.
The hub's activities will continue in 2026 and include support for companies, structured training courses and a network of external experts offering specialist advice on ESG compliance, energy efficiency and due diligence in the supply chain.
Source: Chamber of Commerce and Industry of Serbia (2023[12]).
The way forward
Strengthen a systemic review of applicable environmental regulations and create robust monitoring and evaluation systems to identify and tackle gaps, as well as overlaps and inconsistencies that cause uncertainty and complexity for SMEs. By streamlining the legal and policy framework based on hard evidence, the government could better address real market needs and boost SME investment in the green economy. To support this, establishing a transparent and centralised evaluation framework that covers programmes implemented, for example, by the Ministry of Economy or RAS should be a priority. Such a framework should clearly document beneficiary SMEs, concluded contracts, committed and disbursed funds, and include consolidated assessments of outcomes, with key performance indicators relevant to SME greening. These could include data on annual energy consumption before and after the investment, the share of self-generated energy, carbon dioxide emissions avoided or reduction in energy costs. By jointly addressing the regulatory environment that pushes SME greening and establishing evidence-based support mechanisms informed by sector-specific data, Serbia can enable SMEs to achieve their green objectives more effectively and drive meaningful decarbonisation across the economy.
Develop and implement targeted incentives to scale the impact and SME access in existing calls, based on refinement of findings in the recently developed Green Economy Roadmap. The Ministry of Economy and RAS could further co-ordinate with other competent authorities to increase the budget available for incentives, such as tax breaks, free or subsidised training, advisory services related to the green agenda, funds for upgrading equipment, skills, among others. For support schemes such as the Equipment Procurement Programme, conducting prior diagnostics of SME needs and providing technical assistance would help businesses select cost-effective and high-impact solutions using the grants they receive. Many SMEs have limited awareness of their energy consumption or of opportunities to improve resource efficiency, so integrating technical support into the Ministry of Economy's programmes aimed at promoting greening practices would be advisable.
Develop programmes or platforms to further support the establishment of strategic and cross-border partnerships of SMEs within economic clusters. Based on the expertise gained through the programmes aimed at supporting SMEs in international sustainable value chains and working together with multinationals in Serbia, encouraging nearshoring, RAS could collaborate with key export-focussed clusters in Serbia, such as the Automotive and Mobility Cluster, to plan international missions, establish business connections, and exchange knowledge by visiting fairs, exchanging with other clusters, research institutes and company ecosystems abroad. Serbia would also benefit from establishing a supplier development or matchmaking platform to connect domestic SMEs in strategic green sectors. This would help increase SME visibility, encourage local sourcing by foreign direct investors, and support SME integration into global value chains. Serbia could draw on the example of the Czech Republic’s Sectoral Database of Suppliers, operated by CzechInvest (n.d.[13]), which enables efficient searches for domestic suppliers and potential joint venture partners. The database includes standardised profiles of more than 3 600 manufacturing and information and communication technology (ICT) firms, classified across ten sectors and multiple subcategories, including energy and materials and packaging, sectors that also have significant potential for the green economy in Serbia.
In Serbia, much like elsewhere, SMEs are more exposed to external shocks, whether economic or environmental, than their larger counterparts. This vulnerability was starkly revealed during the COVID-19 pandemic, when lockdowns and global trade disruptions disproportionately affected small businesses in Serbia (CorD, 2020[14]). Nearly one-third of SMEs in Serbia also identify extreme weather events (31%), especially floods (27%), as one of the most significant risks to business (UNDRR, 2021[15]).
Contributing factors to this pronounced vulnerability include limited diversification of markets and activities, restricted access to finance, and constrained crisis-response capacity (OECD, 2022[16]). These are likely to worsen as climate change is projected to cause more frequent and severe disaster events in Serbia (World Bank, 2024[17]).
In this context, this section assesses how the government designs and implements support mechanisms that enhance SME resilience to economic disruptions, natural hazards and increasing climate-related risks.
3.2.1. Enhancing crisis-resilient strategies to prevent SME bankruptcies
The COVID-19 crisis exposed critical shortcomings in the government's ability to prevent and manage surges in business failures during major economic or environmental shocks. As in many economies, SMEs in Serbia were disproportionately affected. SME bankruptcy cases were steadily rising through 2022 before declining in 2023 (Bankruptcy Supervision Agency, 2025[18]). Despite a broader economic recovery and solid growth in 2024, the number of newly opened SME bankruptcies rose again to 417. This matches the 2022 peak of 425 (see Figure 3.1), a year marked by high inflation, steepening energy prices and the withdrawal of COVID-19 support measures. Such a rebound highlights the persistent vulnerability of SMEs and the need for more robust crisis-prevention mechanisms during periods of economic volatility.
Total number of newly opened bankruptcies
Source: Bankruptcy Supervision Agency (2025[18]).
Key measures to enhance the efficiency of preventive insolvency procedures and incorporate early warning principles are included in the revised SME Strategy 2023-2027. The CCIS offers free mentoring services for all registered SMEs, which include an in-depth diagnostic based on 47 business indicators, followed by tailored mentoring and an individual risk management strategy.
Beyond the CCIS’s public calls for mentoring and advisory support, there are no targeted awareness campaigns for entrepreneurs in financial distress, nor a comprehensive, data-driven early warning system (EWS) linked to timely interventions by relevant authorities. Efforts to develop an online EWS using the indicators from the CCIS’s pilot mentoring services began in 2024. However, lack of funding hindered its rollout and scaling by early 2026. Procedural improvements related to lengthy revision cycles for pre-packaged insolvency plans, the absence of an electronic sales system in bankruptcy and better data collection by the Bankruptcy Supervision Agency are also delayed since necessary bylaws can only be prepared upon adoption of the 2021 Draft Amendment to the Bankruptcy Law that is still pending in the National Assembly (see Dimension 2).
To effectively prevent SME financial distress, the government will need to significantly scale up design and funding for relevant support programmes. This is particularly critical as climate change, through extreme weather and related natural disasters, has increasingly intensified economic pressures on SMEs, particularly during global downturns. Serbia’s Third Nationally Determined Contribution states that climate and weather-related disasters resulted in a minimum estimated losses and damages of EUR 10.45 billion over the last 25 years, including an estimated EUR 1 billion arising from severe drought in the summer of 2024 alone (Government of Serbia, 2025[19]).
In 2021, 31% of SMEs in Serbia cited extreme weather, and 27% cited floods as major business risks (UNDRR, 2021[15]). The Ministry of Economy acknowledges that SME resilience has so far been addressed only sporadically and largely through ad hoc government measures, prompting the new SME Strategy to place greater emphasis on disaster resilience (Chamber of Commerce and Industry of Serbia, 2023[20]). Yet, the National Adaptation Programme 2023-2030 makes no mention of SME-specific disaster risk management or climate adaptation, aside from general measures on private-sector involvement in land management and timely notification in the event of extreme weather. This gap highlights a disconnect between environmental policy frameworks and business-focussed measures, with limited integration of SME considerations into climate adaptation planning, and vice versa.
Positively, Serbia has established a functional multi-hazard EWS operating across national, regional and local levels, with SMEs able to subscribe to alert channels, ensuring that businesses operating in high-risk environments receive accurate and up-to-date information. At the local level, disaster risk preparedness and response are supported by the System for Integrated Emergency Management (SIUVS), which provides local self-governments with structured risk data critical for emergency planning and co-ordination. In addition, with EU support, Serbia introduced a Disaster Risk Register at the end of 2022, an interactive, digital database offering real-time, location-specific risk information relevant to both citizens and businesses (UNDP, 2022[21]). The Ministry of Economy has indicated plans to link this tool to its entrepreneurship portal (preduzetnistvo.gov.rs), which could further strengthen business awareness and preparedness for disaster risks. However, funding for the portal's maintenance and development has not yet been secured, so a detailed system for this tool's operation has not yet been developed.
Complementing this, the CCIS, in collaboration with the United Nations Office for Disaster Risk Reduction (UNDRR), held a 2023 workshop to introduce SMEs to the existing UNDRR Quick Risk Assessment tool, enhancing their understanding of exposure, vulnerability to risks and the need for corrective actions. Participants discussed the tool’s risk assessment methodology and exchanged initial insights from pilot testing conducted by five companies. Key takeaways included increased awareness of the importance of insurance and a need for greater knowledge to negotiate more favourable insurance terms. However, SMEs also noted that uptake of the tool could be improved by simplifying online access and strengthening promotion (Chamber of Commerce and Industry of Serbia, 2023[20]). Currently, there are no data available on its overall use by companies.
In 2024, UNDRR further supported resilience efforts by launching a tailored Business Continuity Plan tool adapted to the business context in Serbia, offering practical guidance for SMEs to manage disaster-related disruptions and maintain operational stability. However, government efforts to digitalise risk assessment and resilience tools stalled due to insufficient funding, as noted in the 2024 SME Strategy implementation report, highlighting a critical gap between strategic ambition and operational delivery.
3.2.2. Increasing SME recovery capacity and second-chance opportunities
While preventive measures are key to reducing business insolvencies and ensuring institutional efficiency, strengthening SME resilience demands a broader focus on supporting business survival and recovery during and after periods of distress. As the backbone of the economy, SMEs play a critical role in driving value creation, employment and consumption (Statistical Office of the Republic of Serbia, 2024[22]), making their swift recovery after economic and environmental shocks essential for overall economic stability.
In 2024, liquidation proceedings took an average of 57 months in Serbia to conclude (Statistical Office of the Republic of Serbia, 2025[23]), while they took 22 months on average in other Western Balkan economies such as Bosnia and Herzegovina, Montenegro and North Macedonia (World Bank, 2024[24]). Although data on other insolvency procedures are unavailable, this disparity points to a prolonged recovery period for firms in Serbia. Moreover, due to the lack of comparable data in the previous assessment, it is not possible to identify clear progress in accelerating business recovery or in developing evidence-based support measures.
In 2021, the Ministry of Economy established a working group to draft new regulations on entrepreneurial insolvency; however, this initiative has yet to produce concrete outcomes, including measures to address the lack of new financing for indebted SMEs. In this respect, Serbia still lacks a dedicated second-chance programme for SMEs and does not actively promote related measures through targeted awareness campaigns. Together with a shortage of trained advisers to support such initiatives, these gaps make it difficult to assess the extent to which honest entrepreneurs can recover following debt discharge or preventive restructuring.
Enabling effective and streamlined post-disaster recovery will be decisive in years to come, as climate change is projected to cause more frequent extreme weather disasters (World Bank, 2024[17]). UNDRR’s (2021[15]) work in Serbia highlights that the most common bottleneck to SME recovery after disasters is unclear and lengthy bureaucratic procedures. Additionally, 29% of surveyed SMEs identified a lack of financial resources as a major barrier to building recovery capacity.
Currently, Serbia’s SMEs primarily depend on donor-funded programmes for disaster risk preparedness and recovery. These include the 2024 EBRD SME Go Green Programme, providing loans and cashback grants for climate-resilient technologies; more favourable financing conditions for SMEs in fragile situations through local banks, enabled by the Western Balkans Enterprise Development and Innovation Facility (WB EDIF) Guarantee for SME Resilience; support from the European Investment Bank under the EU Green Agenda; and risk financing and advisory services from UNDRR for risk financing and guidance on resilience investments.
However, the government does not offer financial incentives or dedicated funding to enhance SME disaster recovery. There is also no co-ordinated engagement with private banks or insurers to expand access to finance or develop tailored insurance products. This gap is particularly concerning, as many SMEs lack awareness of the insurance options available to them. A UNDRR study (2021[15]) revealed that 53% of surveyed SMEs had no insurance for disaster-related losses, and 30% had only partial coverage, exposing a significant vulnerability in risk preparedness and financial protection. This reflects a significant structural challenge, as the ability to recover from increasingly frequent climate-related disasters will be a critical factor in determining business resilience in the years ahead.
SMEs also heavily depend on critical infrastructure such as reliable water and energy supply as essential inputs for maintaining operations and enabling swift business recovery. However, the government currently lacks mechanisms to ensure access to these services after climate-induced or other natural disasters, limiting the potential for a second chance for affected SMEs. This gap is further reflected in the National Climate Change Adaptation Programme, which does not include long-term measures specifically aimed at strengthening SMEs’ adaptive capacity to climate-aggravated disasters.
The way forward
Expedite the adoption of the draft amendments to the Law on Bankruptcy to fortify the insolvency system in cases when business failures might spike, as during economic crises. The outstanding legal changes since 2021 have been delaying critical provisions that would improve the efficiency and outcomes of bankruptcy procedures. This concerns the streamlining of pre-packaged insolvency plans, distinguishing fraudulent from honest business failures, and monitoring and evaluation systems, since bylaws must be introduced to mandate that the Bankruptcy Supervision Agency collect critical data on the system’s operational performance to enhance prevention and recovery.
Increase funding for the preventive early warning system and develop SME-targeted second-chance policies. Building on the momentum and base established by the CCIS’s work to develop early warning indicators for SME financial distress, budget allocation should be prioritised to support the piloting of the full-fledged digital EWS and its planned rollout in early 2026.
Mobilise funds for the digitalisation of risk assessment and resilience-building tools for SMEs. While this activity is set out in the SME Strategy Action Plan 2023-2027, the CCIS has not yet begun the planned work on this strategic activity due to limited financial resources. The SME Strategy recognises the importance of strengthening effective, rapid response mechanisms and building long-term SME risk resilience in the face of crisis situations, underscoring the relevance of mobilising resources to safeguard SME liquidity, market position and overall competitiveness.
Introduce incentives and dedicated funding for SME disaster prevention and recovery investments. Examples of instruments the government could introduce include advisory and training on business continuity planning for SMEs, especially in hazard-prone areas, and subsidising climate risk insurance. The implemented UNDRR work provides a solid basis for reflecting real SME needs in the development of such instruments and their potential integration into the next Climate Change Adaptation Programme Action Plan.
For Serbia to reach its net-zero targets, SMEs must have access to both bank and non-bank financing that support a resilient, sustainable transition. Currently, green financial products account for only 5-10% of total bank portfolios, indicating that instruments such as green loans are not widely accessible to businesses (RCC, 2024[25]). At the same time, the share of domestic private finance in funding for Sustainable Development Goals (SDGs) has declined sharply, from 37% in 2010 to 29% in 2023, pointing to institutional gaps in supporting business sector growth and a strong reliance on foreign direct investment (FDI) for sustainability investments (UN Serbia, 2025[26]).
The expansion of sustainable finance in Serbia is primarily shaped by its decarbonisation commitments and objectives to align with the EU Taxonomy and financing standards. Achieving these goals is crucial for building a competitive SME sector, and donor-led projects in Serbia already demonstrate strong SME interest in sustainable finance.
This section analyses how Serbia’s sustainable finance framework and programmes address business needs and enable donor-led project outcomes to spill over into systemic improvements in SME access to finance for the green transition.
3.3.1. Supporting SMEs in an evolving sustainable finance framework
A prerequisite for providing sustainable finance options to SMEs is the establishment of a robust framework that explicitly recognises the role of finance in supporting both the green transition and broader resilience, encompassing environmental, economic and social dimensions. While Serbia has not yet adopted a sustainable finance or ESG framework, the National Bank of Serbia (NBS) has taken important steps to monitor and engage with emerging practices in this space. Since the last OECD assessment in 2022, the NBS has joined the Network for Greening the Financial System and participates as an observer in the Vienna Initiative’s Working Group on Climate Change.
Further progress includes a partnership with the International Finance Corporation (IFC) to build NBS’s institutional capacity6 for ESG integration and the implementation of sustainable finance, primarily through education and training. Additionally, a working group co-led by the IFC and the Association of Serbian Banks, launched in 2022, focusses on strengthening ESG capabilities within the banking sector.
These initial steps provide a solid foundation, but scaling sustainable finance for SMEs and aligning it with Serbia’s broader economic objectives will require a comprehensive regulatory framework, including the development of a national taxonomy aligned with the EU Taxonomy. To date, Serbia has not established a dedicated co-ordination platform or task force with key financial institutions to systematically advance access to sustainable finance for the private sector, particularly SMEs.
On a positive note, the European Union’s Instrument for Pre-accession Assistance (IPA) III 2024 Annual Action “EU for Green Economic Development” has introduced financial instruments to support SMEs in acquiring equipment and capacities for technological modernisation and industrial greening, with a focus on reducing energy consumption and waste. Additionally, Serbia is working with GIZ through the project “Driving the green transition in the private sector” (2024-2026)7 to provide targeted financial support that enables SMEs to profitably engage in the green transition while maintaining their competitiveness. This project provides direct technical and financial assistance to selected SMEs and supports the development of a green tech ecosystem in Serbia starting in March 2026. Between 2022 and 2030, KfW, the German development bank, is also running the Green Economy Facility project that provides three financial institutions in Serbia with credit lines to extend as green loans to SMEs.
In terms of direct government initiatives, there are currently no SME-specific financial incentives dedicated to greening efforts. However, two grant programmes implemented by the Ministry of Economy in 2023 and 2024 have included components relevant to green investments (see Box 3.2).
Policy context
The IFC (2022[27]) estimates that nearly 75% of SMEs in Serbia are seeking to finance green projects to strengthen their future resilience but face significant barriers, including limited access to capital, inadequate skills, and a lack of information about green technologies and financial products.
Against this backdrop, the Serbian government adopted the Regulation on the Establishment of the Small Business Support Programme for the Purchase of Equipment in 2024, which is implemented by the Ministry of Economy in partnership with RAS and selected commercial banks and leasing companies.
Support programme for SMEs to purchase equipment in 2024-2029
Operational aspects
This programme earmarked RSD 800 million (approximately EUR 6 830 000) in dedicated grants in 2024. The funds, provided as de minimis aid, co-finance up to 50% of the net value of equipment purchases, including machinery that improves energy efficiency and environmental sustainability in production processes.
Policy impact
While the 2024 budget allocation was reduced from RSD 1.4 billion (~EUR 11.9 million) available in 2023,1 when 75 companies received support for green equipment, the programme continues to serve as a relevant mechanism for supporting green investments by SMEs. In 2024, 203 companies received grants, of which 35 benefitted from green equipment, with a budget of RSD 194.7 million (~EUR 1.7 million). During 2025, a total budget of RSD 24.9 million (~EUR 213 000) was made available; however, no data are available on the share of green equipment supported. The project is also planned for implementation in 2026, underscoring the Ministry of Economy’s commitment to aligning enterprise development with Serbia’s broader sustainability goals.
Development Chance programme 2024-2027
Operational aspects
In 2024, RSD 600 million (~EUR 5 124 000) were allocated to this programme. The grants are intended to co-finance the purchase of equipment, real estate, and facilities with an investment value above RSD 15 million (~EUR 128 100), with co-financing provided up to 50% of the net investment value. The business entity would provide a 5% co-participation of the net value, and the remaining 45% was paid through a bank loan. The programme included a green component and provided incentives for investment in energy-efficient and environmentally friendly equipment. The public call for grants ran from 4-14 August 2024.
Policy impact
Requests for a total of 45 users were approved, and grants totalling RSD 599 194 082 (~EUR 5 117 117) were paid out. No public calls were foreseen for publication in 2025.
1. Programme funds in 2023 were funded by direct EU grants to RAS through the IPA, while the programme for 2024 was financed solely from the national budget.
Source: Ministry of Economy (2025[28]).
While the broader private sector and SMEs are generally included in stakeholder consultations to design financial incentives and programmes, concrete evidence of their active involvement remains limited. Beyond the public debates held during the drafting of the SME Strategy and Action Plan, there is little documentation of SME input shaping specific sustainable finance measures. Moreover, financial incentives are not subject to independent review, and there is no systematic collection of SME feedback to assess their effectiveness or tailor support to actual needs.
A key prerequisite for the development of sustainable finance for SMEs is the availability of bankable project proposals from companies, which enables financial institutions to build and expand their lending pipelines. At the same time, SMEs need a sufficient level of financial literacy about different financing models and the benefits they can provide for both sustainability performance and operational efficiency. However, data on SME awareness of, and demand for, sustainable financing instruments in Serbia remain limited. This lack of information constrains the ability to assess market readiness and design targeted financial products. On a positive note, Serbia plans to strengthen the green finance component within the forthcoming 2025-2030 update of its Financial Education Strategy. This is expected to improve financial literacy in the relevant sectors and support broader uptake of sustainable financing solutions.
Finally, the attractiveness of sustainable finance products also shapes SME demand. As banks often perceive high costs, targeted government incentives offering concessional terms could help boost demand and uptake. The next section presents examples of such instruments as implemented by governments and donor initiatives.
3.3.2. Increasing SME access to sustainable (bank and alternative) financing
Given the diversity of SMEs in terms of size, sector, technological maturity, and location, firms require different financial solutions depending on their business models and stage of development. Broadly, three groups can be distinguished by their role in the green economy: early-stage green start-ups (“innovators”) developing new technologies or business models; more mature green firms (“enablers”) scaling up innovative solutions; and established SMEs seeking to adopt greener processes, products or technologies (“adopters”).
Compared with traditional finance instruments, sustainable finance instruments that integrate ESG criteria alongside profitability could better address the distinct needs of these groups and improve access to finance for SMEs that contribute to SDGs. At the same time, the growing reporting requirements for sustainability data, driven by obligations on financial institutions and larger firms subject to disclosure rules, may increase compliance pressures across value chains. This could, in turn, make access to sustainable finance more challenging for SMEs unless accompanied by appropriate support measures, such as capacity building, training or simplified reporting standards tailored to firms with limited resources and technical expertise.
Environmental costs are often not fully priced into markets, which increases uncertainty around the returns of green investments. Information gaps further limit lenders' and firms' ability to assess viability. Considering the general financing constraints SMEs already face (see Cluster 1) and the additional factors hindering investment in greening and long-term resilience through finance for adaptation projects, the government has yet to make concerted efforts to improve conditions for sustainable financing.
In Serbia, bank credit remains the primary source of SME financing, with 49% of firms relying on banks. However, many SMEs remain underserved, with the financing gap estimated at around 12% of GDP in 2024, improving significantly from 25.5% in 2027 (World Bank, 2024[29]). Traditional bank finance is often ill-suited to the uncertainty faced by green innovators, while even more established firms that produce, sell or adopt green solutions frequently need financing options beyond debt alone to invest in green projects and improve their sustainability performance.
Available green financing solutions in Serbia, such as green grant programmes shown in Section 3.3.1, serve the dominant segment of the market, i.e. SME adopters seeking to use green technologies to comply with regulations or improve operational sustainability. These SMEs require accessible and affordable financing, both direct and indirect, such as grants, leasing, low-interest loans or sustainability-linked instruments to address high upfront investment costs.
The Ministry of Economy, in co-operation with RAS, regularly implements programmes that provide favourable loans to SMEs. In 2025, for example, a support scheme for SMEs in the manufacturing sector aimed to stimulate investment, enhance liquidity and strengthen competitiveness. The programme, implemented through the Poštanska štedionica Bank a.d. Belgrade, offered financing of up to RSD 15 million (~EUR 128 000), with a reduced interest rate of 2% paid by the borrower, while the remaining portion of the fixed 6.2% rate (4.2%) is subsidised by the Ministry (Tasic & Partners, 2025[30]). However, these instruments are not specifically targeted at environmentally sustainable or green projects and are therefore not considered dedicated green grants or financing mechanisms.
Multilateral development banks play a key role in filling this gap. The EBRD’s SME Go Green Programme (see Section 3.1.1) has been providing several local banks with funds to be made available to SMEs as favourable loans, accompanied by free technical assistance and a grant component. In 2025, the EBRD also issued its first local-currency subordinated loan in the Western Balkans to ProCredit Serbia, fully dedicated to green economy transition investments and to supporting women- and youth-led SMEs. However, more sector-specific loan products or flexible debt arrangements, such as revenue-linked repayment models, are not yet in use, despite their relevance to SMEs developing and scaling green technologies.
Risk-sharing instruments, on the other hand, remain underdeveloped. Serbia lacks dedicated credit guarantee schemes from its Development Fund targeting green or sustainability-oriented SME investments. Their absence limits access to finance for firms with insufficient collateral and contributes to a persistent financing gap. Other de-risking approaches, such as blended finance mechanisms that combine public and development finance with private capital, have also not been reported, constraining the mobilisation of investment for green SME projects.
Market-based financing for SME greening in Serbia is practically non-existent. The issuance of green bonds or sustainability-linked securities tied to SME lending has progressed slowly, largely due to shallow capital markets characterised by low liquidity and limited trading volumes. Additionally, investor interest has remained weak since the last OECD assessment in 2022. Yet, such instruments could significantly broaden financing options for medium-sized firms, improve transparency, and mobilise private capital for sustainable growth. Early initiatives, such as a minibond for small businesses, launched by a Serbian subsidiary of Intesa Sanpaolo (2025[31]), illustrate the potential of tailored capital market solutions that could be scaled with targeted government support.
Alternative debt instruments are also largely absent. Green leasing, which would allow SMEs to spread the cost of sustainable equipment through periodic payments, is not available. While Serbia has strengthened the general leasing framework since 2022, no targeted measures have been implemented to encourage SMEs to use leasing for eco-efficient investments. Given the widespread use of leasing and hire-purchase across the European Union, expanding access to such instruments could materially support SME investments in greener technologies and assets.
Finally, equity and quasi-equity financing, critical for innovative SMEs undertaking higher-risk green projects, remains particularly limited. None of Serbia’s six existing private equity or venture capital funds prioritises green business models or integrates ESG criteria. This reflects both the early stage of the start-up and venture capital ecosystem and broader business environment constraints. More importantly, it highlights the absence of a clear public strategy to mobilise equity for sustainable innovation. Positively, core institutions such as the Innovation Fund are preparing to further promote environmentally friendly investments by launching an EU-funded project (expected to start in late 2026 or early 2027) aimed at establishing a programme to support the private sector in scaling up green technologies and solutions. Other support instruments relevant for innovator SMEs, including incubators, accelerators, and research and development (R&D) grants, are discussed in Sections 3.4 and 3.5.
The way forward
Create a sustainable finance platform, or a similar co-ordination mechanism, to drive the development of sustainable finance frameworks and facilitate engagement with the private sector, particularly industry, banking, academia and civil society. This platform should, among other priorities, work towards developing a national taxonomy, continuing the standardisation of sustainable finance offerings and requirements, and advising the government on policies for strengthening SME access to sustainable finance, both through banks and alternative external financing mechanisms. It should also formulate initiatives to support capacities for SME sustainability reporting by providing targeted training and guidance in line with international standards (OECD, 2025[32]), such as the Voluntary Standard applied in the European Union, particularly as data on environmental performance is increasingly expected by financial institutions and by supply chain partners subject to EU sustainability legislation. Inspiration can be drawn from the EU practice shown in Box 3.3.
Introduce targeted government financial incentives informed by systematically collected SME input. Currently, Serbia lacks key instruments to expand SME access to sustainable financing. Beyond scaling up existing green grants, Serbia’s Development Fund could introduce loans with concessional terms for SMEs, such as lower interest rates (building on the experiences of programmes introduced by the Ministry of Economy), reduced collateral requirements and extended maturities. Donor-funded projects, such as those of the EBRD, already offer valuable lessons, and their support could be extended to build domestic institutions’ expertise in crowding in private capital for green SME projects. Another risk-sharing mechanism could be a green credit guarantee scheme, with eligibility criteria aligned to environmental objectives. Serbia can build on its experience with the guarantee scheme implemented through the National Bank during the COVID-19 recovery, adapting it to ensure strong uptake and effectiveness for SMEs. To ensure accountability and impact, such instruments should be accompanied by a robust monitoring and evaluation framework that tracks and reports on the environmental performance of guaranteed portfolios (OECD, 2022[33]). This would require targeted technical assistance to strengthen SME sustainability measurement and reporting, ensuring firms apply for guarantee schemes (see Section 3.4). Financing for these measures could be partly drawn from the proceeds of Serbia’s green bond, issued for the first time in 2021.
Support SME access to capital market solutions by crowding in private-sector equity financing for innovative green ventures. Given Serbia’s small venture capital market and the absence of sustainable equity finance, the Innovation Fund of Serbia could establish a dedicated programme for high-growth green projects similar to its existing Serbia Ventures AI programme. Alternatively, the government could channel public funds, through the reinstatement of the Green Fund (as referenced in the Green Economy Roadmap), to mobilise equity capital, drawing inspiration from successful examples such as France’s France Relance Recovery Plan and the United Kingdom’s Energy Entrepreneurs Fund.8 Given the limited data on financing bottlenecks faced by green start-ups, the government, particularly the Innovation Fund and RAS, could go beyond expanding the supply of risk capital and provide targeted technical assistance to strengthen investment readiness and the commercialisation capacity of green innovations.
About the platform
The Platform on Sustainable Finance, first set up in October 2020 and now in its third mandate, is an expert advisory body established under Article 20 of the EU Taxonomy Regulation to support the European Commission in developing and streamlining the EU sustainable finance framework to deliver on the aims of the EU Taxonomy Regulation, the Green Deal and the EU climate targets for 2030 and 2050.
The platform’s membership consists of world-leading sustainability experts from the financial, non-financial and business sectors; non-governmental organisations (NGOs) and civil society; academia and think tanks; individual experts; and public and international institutions.
Key functions
Under the newest mandate, the platform is guided by four priorities set by the Commission:
simplify and improve the coherence and usability of the technical screening criteria of the EU Taxonomy draft Delegated Acts (set out in the Omnibus package)
develop additional and revise existing technical criteria defining sustainable economic activities
track and report on sustainable investment flows
implement transition finance policies.
Notable achievements
In March 2025, the platform published the report, Streamlining Sustainable Finance for SMEs, which proposes a tailored streamlined approach, “the SME sustainable finance standard” for banks and other financiers to classify loans or other types of financing they provide to SMEs as sustainable (green or transition) finance and simplify any related voluntary reporting.
Serbia currently lacks a co-ordinated sustainable finance framework, leaving banks to define and design green finance products independently. This creates fragmentation and limits SME access to affordable financing for the green transition. A platform similar to the European Union’s could help harmonise definitions, align Serbia’s financial sector with EU Taxonomy standards, and provide clear guidance to banks. By streamlining approaches, such a mechanism would lower transaction costs, foster innovation in financial products, and expand SME opportunities.
Source: European Commission (2025[34]).
Beyond financial support, SMEs need assistance to overcome barriers to the green transition and build more resilient business models. In Serbia, 42% of SMEs cite the complexity of administrative or legal procedures related to resource-efficiency actions as a barrier, compared with 35% in the European Union (European Commission, 2024[4]). Therefore, businesses require access to targeted non-financial support infrastructure, including advisory services, capacity building, partnerships and ecosystems, across all stages of the business lifecycle.
Additionally, there is a growing need for easier market access and greater resource availability (e.g. consulting on regulatory compliance, access to digital tools, etc.), which can be met through stronger industry partnerships and business networks that can either complement or substitute for government support. However, business associations note that SME support initiatives in Serbia are often fragmented rather than strategic, while local government bodies reportedly lack sufficient capacity to provide effective assistance (Ministry of Economy, 2025[1]).
This section, therefore, evaluates the success of government support programmes in enabling SMEs’ green transition and the policies put in place to encourage business-to-business ecosystems that boost SME resilience.
3.4.1. Scaling up public non-financial support for SMEs in a green and resilient economy
While Serbia does not operate a dedicated business support programme for green and resilient transformation, capacity-building measures are embedded within the SME Strategy 2023-2027. Although the annual action plans for 2023 and 2024 were formulated before the publication of the 2025 Roadmap for a Green Economy, which assesses SME needs for non-financial support, several relevant initiatives were already underway.
These include continued SME education and guidance on circular economy practices, as well as plans to expand training on decarbonisation, Digital Product Passports (e.g. textile waste), circularity calculations, and the CBAM. SMEs now benefit from access to two key platforms, the Circular Economy Platform and the Responsible Business Hub (Box 3.1), which provide resources such as best-practice guides, information on financial support and opportunities for cross-sectoral collaboration and investment.
However, constraints persist. The government reports difficulties in scaling advisory services for circular transformations due to the Accreditation Body of Serbia’s limited capacity to certify consultants, a challenge it intends to address. While targeted trainings on carbon footprint calculations and ESG standards were delivered to companies in 2024, planned trainings on energy efficiency, alternative energy use, and circular economy topics were postponed pending the completion of the needs assessment as part of the Green Economy Roadmap.
Moreover, the proposed programme to incubate innovative green projects and co-finance mature solutions (outlined in the SME Strategy) was not launched. Instead, SMEs accessed broader donor initiatives, such as the EU Green Agenda and the Circular Economy for Local Communities project funded by the Global Environment Facility, for which public calls were issued. A total of USD 170 000 was awarded to the 17 best innovative solutions that contribute to the development of the circular economy, including projects from research institutions, businesses and civil society organisations.
To date, most support measures focus on mitigation (e.g. decarbonisation and energy use) and insufficiently address broader resilience building, like long-term climate adaptation or ESG initiatives aimed at enhancing business continuity and risk management for SMEs. There is also limited differentiation in support across business lifecycle stages. Start-ups, scaling firms, and mature SMEs receive largely undifferentiated assistance, except for a few targeted measures under the Startup Strategy 2021-2025, which seeks to strengthen support for start-ups and improve firms’ co-operation with relevant ecosystem participants, such as investors and other founders.
Additionally, implementation reports lack data on outreach effectiveness and awareness raising. The needs assessment conducted as part of the Green Economy Roadmap indicates uneven awareness and engagement across sectors, with higher interest reported among exporters and SMEs in more tightly regulated industries (e.g. rubber, plastics, wood) than in broader manufacturing segments, underscoring the value of more sector-specific support approaches.
Moreover, there is no formal mechanism for SMEs to provide structured feedback on the relevance or quality of support services that facilitate their transition to greener, more resilient business models. This limits the ability to refine programmes based on actual SME needs and implementation experiences. As Figure 3.2 shows, a considerable share of SMEs in Serbia find that government support measures are not sufficiently supportive (36%), and more than one-quarter of SMEs surveyed are unsure about the effectiveness of public support services.
Percentage of surveyed SMEs (n= 350)
Notes: Answers to the question: “How do you perceive the role of government in supporting the implementation of the Green Transition?”
The sample size of 350 SMEs represents roughly 0.2% of total SMEs in Serbia as of 2022 (Statistical Office of the Republic of Serbia, 2024[22]).
Source: Ministry of Economy (2025[1]).
Private business support services in Serbia currently do not offer dedicated assistance for business greening or resilience building. This highlights an untapped opportunity for the government to expand the reach and effectiveness of support by collaborating with private service providers.
3.4.2. Exploiting the power of networks for the sustainable growth of SMEs
Experience from OECD Member countries shows that targeted policies can successfully integrate SMEs into business networks,9 enabling them to benefit from knowledge transfer, innovation, internationalisation and productivity gains (OECD, 2023[35]; 2019[36]; 2008[37]). In the context of the green economy, expanding and strengthening such networks is essential for SMEs to access key resources, such as data, skills and technology, and to improve their adaptability and resilience (see also Annex).
Aligned with Serbia’s SME Strategy 2023-2027, and particularly its goal of strengthening SME competitiveness in domestic and foreign markets, there is a strong emphasis on accelerating the transition toward an economy driven by entrepreneurial initiative, knowledge and innovation. This strategic direction reflects a broader global trend in which access to specialised knowledge is becoming increasingly critical for business success. In this context, networks are gaining importance, as collaborative firms are more likely to innovate. The rise of open innovation could further support this by lowering barriers for SMEs to access external resources and expertise.10 It is estimated that there are more than 30 business cluster organisations in Serbia at present, but the exact number of SMEs that are members of such clusters or other formal professional or business networks is unknown. Most of these networks function as basic buyer-supplier relationships, connecting SMEs to firms along the pre- and post-production value chain. Such linkages help SMEs improve cost efficiency and streamline operations, while also creating opportunities for productivity improvements and innovation spillovers.
Notably, the Serbian government has yet to adopt a strategic approach to fostering SME participation in formal partnerships, such as business-to-business or business-to-academia collaborations that could enhance resilience and accelerate the green transition. While some financial and technical support exists, including through online platforms and hubs,11 there has been limited progress since the last OECD assessment in 2022 in actively facilitating SME involvement in innovation parks, (green) industrial zones or other structured collaborative ecosystems. For example, in Serbia’s more than 350 industrial zones, SMEs often face infrastructure and utility constraints, such as inadequate transport links and insufficient energy, waste, and water systems, reducing the attractiveness of these zones for high-value green investment.
With FDI in Serbia steadily increasing over the past decade (World Bank, 2025[38]), there is growing potential for SMEs to benefit from linkages with larger foreign subsidiaries. Realising these benefits, however, requires targeted government action to foster SME networks, including with domestic firms, and strengthen SMEs’ absorptive capacity. Prioritising greenfield investments, which are more likely to generate spillovers, is particularly important (Farole and Winkler, 2013[39]).
To date, the government has not adopted a structured approach to develop such networks, aside from two programmes by RAS (see Box 3.4), missing an opportunity to enhance SME resilience and long-term competitiveness.
Policy context
RAS runs two programmes aimed at strengthening SME access to markets by integrating them into the supply chains of multinational companies (MNCs) with global reach and distribution networks. These initiatives seek to build SME capabilities, improve competitiveness, expand operations into new markets, and foster co-operation with MNCs and their suppliers both within and outside Serbia.
Operational aspects
Programme of Support for Companies to Enter the Supply Chains of Multinational Companies
The third and fourth years of the programme running in 2023 and 2024, awarded selected SMEs grants for the implementation of activities supported under the following intervention measures:
1. support for investment in tangible assets (e.g. production equipment)
2. support for investment in intangible assets (e.g. software solutions)
3. consulting support for improving business performance.
Under the intervention measure “3) consulting support for improving business performance”, SMEs could receive reimbursement of 70% of eligible costs (up to RSD 1 500 000 or ~EUR 13 000) for consulting services related to compliance with green industry standards, covering technical documentation, studies and environmental reporting.
Programme of Support for Companies to Adopt Business Principles in International Value Chains
The programme launched in 2023 and continued throughout 2024, awarding selected SMEs for the implementation of activities supported under the following intervention measures:
1. support for improving competitiveness and digitalisation
2. consulting support for improving business performance.
Under the intervention measure “2) consulting support for improving business performance”, SMEs could receive 70% (for micro and small businesses) or 50% (for medium-sized enterprises) for support on compliance with green industry requirements, such as preparation of technical documentation, reports to reduce environmental pollution, energy efficiency, and reduce industrial emissions.
Compared to 2024, funding for medium-sized enterprises was slightly reduced (to a 50% refund eligibility), but eligibility was expanded by lowering the employee threshold from 15 to 5 to better support smaller manufacturing firms aiming to become suppliers. Additionally, paper and cardboard packaging production was recognised as another priority sector for co-operation with MNCs.
Policy impact
During the 2023-2024 cycle, the Programme of Support for Companies to Enter the Supply Chains of Multinational Companies awarded 19 companies with a budget of EUR 2.03 million. Most recipients operate in automotive, metal processing, machinery, electronics, etc., with a strong prioritisation of medium-sized and export-oriented entities, where investments provide tangible benefits through improved business performance, help preserve jobs, and strengthen market positioning with MNCs in the domestic market. The results for the 2024-2025 call, with a budget of RSD 180 million (~EUR 1.54 million), have not yet been published.
Under the Programme of Support for Companies to Adopt Business Principles in International Value Chains, nine SMEs received funding in 2023/2024, with non-refundable co-financing of RSD 22.07 million (~EUR 190 000). The results for the 2024-2025 call with a budget of RSD 45 million (~EUR 385 000) are not yet available.
Source: RAS (2025[40]).
While RAS’s programmes allow SMEs to integrate into multinational value chains and include funding tied to sustainability criteria, their overall scale has remained limited in recent years. Moreover, no comparable initiatives exist to support SMEs seeking to expand their supplier or production networks within local or regional value chains.
In a 2024 survey by the Ministry of Economy, 29% of surveyed SMEs identified increased networking opportunities with other green businesses as highly valuable for implementing more sustainable practices (Ministry of Economy, 2025[1]). This highlights the important role of government in facilitating such connections to support the green transition.
The way forward
Prioritise the delivery of deferred SME green capacity-building measures. In the next action plan cycle of the SME Strategy (noting that the Action Plan for 2025-2027 is yet to be adopted), the government is encouraged to ensure postponed training programmes on energy efficiency, alternative energy sources, and the circular economy are implemented without further delay. Planned but uninitiated actions by the Ministry of Environmental Protection, such as incubation for innovative green projects and co-financing for mature projects, should be introduced through appropriate government-led programmes. These programmes should uphold planned levels of support, both in budget commitments and in targets for the number of SMEs trained, rather than attributing implementation to donor-funded projects running in parallel.
Tailor green support measures to SME size, age and sector. Findings from the SME assessment under the Green Economy Roadmap indicate varying levels of engagement and awareness across sectors, with some showing higher uptake of government greening programmes. Support measures could be adapted to address these differences and respond to the distinct needs of enterprises at different stages of development, recognising that start-ups, scaling firms and mature SMEs face unique challenges in preparing for a successful green transition and building resilience.
Rapidly strengthen the Accreditation Body of Serbia’s capacity to certify consultants for SME support programmes. Delays in certifying consultants to provide advisory services for SMEs’ circular transformation have hindered programme implementation. The government may consider streamlining co-ordination with relevant stakeholders, including external partners, to help the Accreditation Body expand its resources and certify the required number of consultants, ensuring the timely and effective delivery of activities. This is especially critical as many green SMEs that export need strong support for environmental certifications to deepen their integration into regional and EU supply chains. The government could further consider partially reimbursing certification costs to help SMEs meet buyer standards once the Accreditation Body has established sufficient capacity to run targeted technical assistance programmes.
Leverage greenfield investments to strengthen SME networks. The government is encouraged to capitalise on incoming FDI to foster SME networks within free economic/industrial zones or innovation parks, building on RAS’s expertise in integrating SMEs into international value chains and in the nearshoring activities of MNCs. These networks could prioritise engagement with prime export markets to facilitate knowledge exchange, joint participation in green projects, and integration into sustainable value chains, thereby enhancing SME competitiveness through spillovers. An inspirational case is the India-Sweden Innovations’ Accelerator Programme, illustrated in Box 3.5.
Launched in 2012 by the Swedish Energy Agency in partnership with Business Sweden and the Confederation of Indian Industries, the programme supports Swedish SMEs in renewable energy and clean technology to enter the Indian market. The programme is part of the intergovernmental co‑operation between India and Sweden in new and renewable energy technologies.
The programme aims to mitigate climate change through a transition to clean energy in India. India and Sweden share the common objective of innovation and entrepreneurship as essential tools for boosting competitiveness and sustainable economic growth. For Swedish cleantech companies, the Indian energy market is particularly attractive due to strong economic growth and rapidly rising energy demand. India is the second largest contributor to electricity generation demand growth that needs to be met in line with its sustainability goals (IEA, 2025[41]).
Structure of the programme
Duration: 18 months.
Activities: Three market visits to India, meetings with business partners and investors, and export coaching.
Target participants: Swedish SMEs with proven energy-related solutions. Participation is free but requires active commitment and time.
Membership: 56 Swedish environmental technology companies with verified applications and/or solutions that can meet the needs of the Indian market, its priorities and its purchasing power, with the latest three additions in March 2025.
Linking SMEs with foreign investors and MNCs would accelerate the transfer of skills, standards and market access opportunities. Prioritising ties with prime export markets would also strengthen Serbia’s competitiveness and resilience in the green transition. Adopting a structured programme, as in the India-Sweden case, could give SMEs from Serbia a clear pathway to internationalisation and sustainable growth.
Source: Swedish Energy Agency (2023[42]).
Achieving a low-carbon, green economy while strengthening resilience requires SMEs in Serbia to continuously innovate and adapt to shifting market demands and environmental standards. To remain competitive at home and abroad, SMEs must harness innovation to boost productivity and improve the integration of Serbian exports in foreign value chains (Vienna Institute for International Economic Studies, 2021[43]).
Partnerships and networks among businesses, innovators, research institutes, and academia will therefore play a growing role in building SME resilience through access to and use of knowledge. Notably, linkages among innovative SMEs already grew by 34 percentage points (p.p.) and public-private co-publications by 26.5 p.p. between 2018 and 2025 (European Commission, 2024[44]).
Still, further improvements are needed to realise SMEs’ full innovation potential. This section aims to assess how government strategies translate into advanced innovation infrastructure, effective incentives and strengthened SME knowledge networks that enable sustainable transformation.
3.5.1. Advancing strategic innovation for a green and resilient economy
Serbia’s innovation policy framework is shaped by several strategic documents, including the SME Strategy 2023-2027, the Industrial Policy Strategy 2021-2030, the Smart Specialisation Strategy 2020‑2027, and the Startup Ecosystem Development Strategy 2021-2025. These strategies consistently position innovation as a key enabler of competitiveness and structural transformation, with the green transition recognised as one of the policy goals it is expected to facilitate.
Across the SME Strategy and Industrial Policy action plans, the Ministry of Economy's efforts to enhance SME innovation capacities rely on existing instruments managed by the Innovation Fund. For instance, the SME Strategy’s 2024-2025 Action Plan includes an innovation voucher scheme implemented by the Innovation Fund. However, these initiatives typically address sustainability and resilience horizontally, where green or resilient innovation is not explicitly targeted but could be selected if it aligns with S3 goals. Further, there is no evidence of co-ordination or co-financing of mechanisms employed by the Innovation Fund.
A more direct and deliberate approach is seen in the Programme for the Development of the Circular Economy 2022-2024, which promotes collaboration between research institutions and firms to support innovation and production optimisation based on circular principles. Yet, this measure is not SME-specific, and its limited scale, targeting just nine collaborations in 2024, suggests minimal overall impact.
Generally, there is a lack of data on the actual impact of these innovation measures, particularly regarding SME productivity and their contribution to long-term resilience, such as reduced material needs. The government has not conducted any evaluations or studies assessing how innovation policies affect SME performance. This limits the ability to refine policy interventions, allocate resources effectively, and design targeted support measures that enhance innovation-driven growth of SMEs.
Nonetheless, some promising initiatives exist within the innovation ecosystem. The BioSense Accelerator, for example, has provided a three-month intensive programme for information technology (IT) entrepreneurs focussed on climate-smart agriculture and sustainable resource management between 2019 and 2023, though its continuity beyond 2023 remains uncertain (BioSense Institute, 2023[45]). Similarly, Smart Kolektiv, a Belgrade-based NGO, supports socially and environmentally driven start-ups through incubation, mentoring, and funding (Smart Kolektiv, 2020[46]). Still, both initiatives remain donor-dependent, and their scalability and long-term impact are unclear, highlighting the need for more structured, government-backed programmes to support sustainable innovation at scale.
Likewise, the government has yet to prioritise strengthening SMEs’ capacity to absorb economic and environmental shocks by promoting innovation that enhances resilience. Current strategies show limited alignment with this goal, raising concerns about the effectiveness of existing innovation measures in supporting long-term business continuity. A potential entry point would be to mainstream greening criteria across broader grant schemes, encouraging SMEs, regardless of whether they operate explicitly green business models, to adopt more sustainable practices. This could be effectively led by the Innovation Fund of Serbia, the primary state institution responsible for implementing innovation support programmes.
More indirect support measures for innovation, such as R&D tax incentives, lack alignment with sustainability objectives. ESG considerations are neither integrated into eligibility criteria nor used to differentiate support levels, resulting in uniform incentives that fail to recognise the greater innovation constraints SMEs face compared to larger firms. Similarly, while public procurement of innovation is in its early implementation phase, it does not currently prioritise green or resilience-enhancing innovation. Compounding these gaps, the absence of systematic monitoring and evaluation mechanisms limits the government’s ability to assess the effectiveness of these instruments and refine them based on empirical evidence.
Lastly, Serbia’s intellectual property (IP) framework has not changed since the last OECD assessment in 2022. It still lacks targeted mechanisms to support sustainable innovation by SMEs. There are no fast-tracked patent procedures or expedited technology approvals for innovations aligned with the SDGs, measures that could accelerate the market uptake of green solutions. Additionally, the absence of frameworks for open innovation, such as voluntary licensing or patent pools for sustainable technologies, limits collaboration and the diffusion of climate-smart innovations. These gaps reduce the overall impact of IP policy on advancing SME-driven sustainability and resilience.
3.5.2. Capitalising on knowledge networks for driving SME innovation
To respond effectively to the global megatrends outlined in Section 3.1, SMEs need to be embedded in knowledge and innovation networks that foster adaptability and long-term value creation. Strengthening their participation in resilient ecosystems is essential for sustaining growth amid disruption. SMEs will need to tap into critical resources, such as university research and public R&D, by benefitting from technology transfer and accelerating the adoption of sustainable solutions.
While Serbia does not currently offer dedicated technology-extension services tailored to SMEs or focussed on enhancing their sustainability, several positive developments have emerged since the 2022 assessment. In addition to the four established technology transfer offices (TTOs) at the universities of Belgrade, Kragujevac, Niš, and Novi Sad, and approximately 20 other offices within scientific and research institutions, a significant milestone is the upcoming launch of the BIO4 Campus in Belgrade, planned for 2026, though procurement has yet to be launched. This advanced R&D hub is designed to bridge science, technology and industry, with a focus on sectors such as agriculture, environmental protection and biodiversity conservation.
With support from GIZ, Serbia’s ICT Hub (2025[47]) launched the GreenUp Hub in 2025 to foster the growth of green technologies developed by start-ups, scale-ups and SMEs. A comprehensive study conducted by the newly established hub assessed more than 130 green tech companies across the economy. Of the 63 technological solutions identified, most are concentrated in precision agriculture, the circular economy, and digital energy solutions, with a strong geographic focus in Belgrade and Novi Sad. While 45% of these solutions are commercially deployable, indicating solid market readiness, domestic demand remains weak and commercial scaling is limited.
Despite these promising initiatives, there are no available data on the extent of SME engagement with existing TTOs, making it difficult to assess impact. Furthermore, the government has not introduced cluster-specific policies to foster systematic co-operation between businesses and academia. Such an approach could accelerate sustainability and resilience, particularly in strategically important sectors such as agriculture and food, manufacturing, machinery, green energy and other service sectors. The development of Sectoral Decarbonisation Roadmaps in Portugal shows how collaborative approaches could be leveraged to drive emissions reductions in key economic sectors (OECD, 2025[48]).
The Innovation Fund continues to implement its Collaborative Grant Scheme Program, which supports collaborative patenting and commercialisation efforts by businesses and academia. The programme specifically incentivises joint R&D projects by providing co-financing for consortia comprising SMEs and public research institutions. It, thereby, promotes knowledge transfer and innovation-driven partnerships. However, its impact is constrained by its open, cross-sectoral design and limited outreach, as support is not embedded in systematic, cluster-based co-operation that could scale partnerships. Annually, it allocates approximately EUR 3 million, benefitting around ten SMEs.
The Science Fund also implements the Green Program of Cooperation between Science and Industry, which specifically supports joint projects aimed at advancing more sustainable economic activities. To date, the programme has funded 20 projects; however, it remains unclear how many involved SME participation (see Box 3.6).
Policy context
According to Serbia’s Ministry of Economy (2021[49]), scientific-industrial co-operation remains sporadic and is largely driven by individual contacts and initiatives in Serbia. Scientific and academic projects often lack a strong focus on industrial applicability. The objective of the Green Program of Cooperation between Science and Industry is, therefore, to boost co-operation between science and industry by leveraging available scientific potential, funding projects and excellent researchers to tackle societal problems, thereby also enhancing the professional capacities of scientific research institutions and young researchers.
Operational aspects
More specifically, the programme supports sustainable development and addresses the triple environmental crisis (climate change, pollution and biodiversity loss) while improving pollution monitoring, reporting and prevention in line with Serbia’s goals on zero pollution, the circular economy and ecosystem restoration.
The total budget of the programme is EUR 3.5 million, with a maximum of EUR 200 000 allocated per project, financed through the budget of the Ministry of Science, Technological Development and Innovation. The programme follows a structured two-phase model: an initial applied research phase lasting up to 24 months, followed by an optional second phase of up to 12 months, focussed on formalising industry partnerships to advance and commercialise green technologies. The second phase was scheduled to begin in the second half of 2025.
Policy impact
While the project is still in progress, only preliminary data are available for selected projects. These focus mainly on environmental engineering, clean technologies and pollution reduction, including water and wastewater treatment, circular industrial processes, pollution remediation, and sustainable agriculture and forestry.
Although the programme represents an important step in expanding research-driven public grants, links to business remain limited. Industry involvement is largely confined to an optional commercialisation phase, with companies required to provide only a modest 10% co-financing to qualify for second-stage support. While this low threshold may encourage SME participation, it also risks weaker ownership and one-sided collaboration. Stronger incentives for business engagement, potentially through higher co-financing requirements combined with increased public support, could help deepen science-industry co-operation.
Source: Science Fund of the Republic of Serbia (n.d.[50]).
Other key advancements under the implementation of the Industrial Policy include the launch of activities in late 2025 to strengthen co-operation with universities in the context of the green transition. These efforts focus on knowledge transfer and the creation of specialised research, innovation and consulting centres. Strengthening these linkages is critical to building a more dynamic innovation ecosystem that supports SME competitiveness, accelerates green transformation, and fosters long-term economic resilience.
The way forward
Conduct systematic impact assessments of SME innovation support measures. The government is encouraged to evaluate programmes to understand their effects on SME productivity and long-term resilience. Insights from these assessments can guide the refinement of policy interventions, optimise resource allocation and integrate considerations of green transition and resilience into innovation support. To this end, the Ministry of Economy, in collaboration with relevant institutions, could establish a comprehensive monitoring framework for SME innovation support. Consolidating its data with those of the Ministry of Science, Technological Development and Innovation, the Innovation Fund and the Science Fund, covering annual disbursements, policy objectives and the number of SME beneficiaries, would facilitate more robust impact evaluations and strengthen understanding of how innovation support contributes to SME competitiveness and the green economy.
Promote SME-focussed collaboration spaces to drive green innovation and resilience. The government may consider strengthening and better targeting existing accelerators, incubators and industrial parks to ensure they are tailored to SME needs, enabling effective collaboration on R&D that supports the green transition and strengthens economic resilience. Currently, such spaces are limited or primarily serve larger, foreign companies, thereby missing opportunities to foster SME-driven innovation and growth. Serbia could draw on international best practices, such as Korea’s model (see Box 3.7), to design inclusive, impact-oriented innovation hubs that integrate SMEs into knowledge networks.
Leverage innovation procurement policy as a strategic driver of sustainable innovation. Serbia could strengthen its public procurement system to encourage collaboration between the public and private sectors on innovative services. Procurement guidelines could prioritise green and resilience-enhancing innovations and provide clear pathways for SMEs to participate in tenders, following models similar to GPP.
Strengthen SME technology-extension services and technology transfer engagement. The government may consider developing SME-tailored technology-extension services to support the adoption of new and sustainable innovations. Engagement with existing and emerging TTOs could be improved, with cluster- and sector-specific approaches that reflect the distinct needs of SMEs. These services could be aligned with S3 priorities to ensure coherence with innovation objectives, promote collaboration between research institutions and SMEs, and facilitate the commercialisation of R&D outputs. With funding under the green transition pillar of the National Recovery and Resilience Plan (RRP), Portugal’s SME agency has adopted a model that serves as a strong example for Serbia in this field (see Box 3.8).
Launched in 2003 by the Korean National Cleaner Production Center and later implemented by the Korea Industrial Complex Corporation (KICOX), the Eco-Industrial Park (EIP) programme promotes industrial development that is economically and environmentally sustainable.
Initially, a top-down approach failed to attract private participation, but KICOX introduced a phased, business-focussed strategy that engaged local experts, resident companies, and regional co-ordinators to build collaborative industrial communities.
KICOX also developed tailored EIP models for each industrial complex, based on their capacities and comparative advantages, including SME-focussed models such as Banwol-Siwha and large-scale infrastructure models such as Ulsan-Mipo. At the Banwol-Siwha site, clustered SMEs could, for example, benefit from programmes aimed at energy management systems (World Bank, 2025[51]).
Between 2005 and 2015, 388 projects were funded and 197 constructed, resulting in 6.48 million tonnes of CO₂ reductions, 1.09 million tonnes of other toxic gas reductions, KRW 1 848 billion (Korean wones) (approximately EUR 1.6 billion) in resource savings or revenues, 848 jobs, and 56 new patents. Success stemmed from demonstrating quick economic returns, targeted engagement, and performance-based government funding that encouraged private investment while ensuring accountability.
The Korean experience offers direct inspiration for embedding an SME focus in the development of industrial parks centred on sustainability and green business practices. Serbia could also build synergies with the ongoing EU-funded Eco-Industrial Park Programme (co-led by IFC and local governments), which is piloting four EIPs. Following the designation of the first greenfield EIP in Šabac, the recent agreement for a brownfield investment in Kragujevac signals momentum for scaling up such models. By integrating tailored SME-focussed approaches, Serbia can strengthen private-sector participation, maximise economic and environmental benefits, and accelerate the transition toward more resilient industrial ecosystems.
Source: Global Green Growth Institute (2017[52]).
As part of its RRP, Portugal has been promoting the adoption of green technologies among SMEs through a collaborative, consortium-based approach. A flagship initiative is the “Mobilising Agendas” programme, which funds projects implemented by partnerships bringing together companies, business associations, universities, research centres and public bodies.
In total, 53 sector-focussed agendas have been launched with support from Portugal’s SME agency. By the end of 2024, 13 green-related agendas were underway, backed by EUR 145 million in initial investment.
A concrete example is the Mobilising Agenda for Sustainable Plastics, which encourages the use of recycled and reused materials and advances the use of biodegradable plastics. It is structured around eight work packages addressing different research and innovation challenges, such as developing secondary raw materials from contaminated waste streams.
A key success factor that is highly relevant for Serbia’s context as well is the strong role of industry-based technology centres. Their established links with universities and close engagement with SMEs have enabled rapid implementation, including providing green start-ups with access to laboratories and applied research infrastructure.
To replicate such a model successfully, Serbia (i.e. RAS) would need to be attentive to constraints identified in the Portuguese experience, notably weak university-industry collaboration, limited and irregular funding for industrial research and delays in the disbursement of public funds.
Source: OECD (2025[48]).
Networks play a major role in increasing resilience as a certain degree of redundancy and diversification across nodes helps to reduce interdependence, promote risk management culture, reduce the cost of shock mitigation and allow for easier recovery and adaptation (Brende and Sternfels, 2022[53]; OECD, 2023[54]; OECD, 2004[55]). SME networks can take different forms, comprising various actors that exchange products, services, knowledge and other resources. They can be divided into four main types, as illustrated in Annex Figure 3.A.1.
Source: Based on OECD (2023[2]), drawing on EC/OECD (2023), Unleashing SME Potential to Scale Up, https://www.oecd.org/cfe/smes/sme-scale-up.htm, Phase II on Network expansion; EC/OECD (2023), Fostering FDI-SME Ecosystems to Boost Productivity and Innovation, https://www.oecd.org/industry/smes/fdi sme.htm, Phase II on FDI-SME linkages and ecosystems.
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← 1. Based on biannual data of electricity prices (EUR/kWh) for non-household consumers in the band IB consuming more than 20 MWh but less than 499 MWh. Excluding taxes and levies.
← 2. Until recently, most SMEs in Serbia were supplied under commercial electricity contracts rather than the regulated regime, leaving them fully exposed to market price fluctuations, with tariffs at times double or triple those paid by households or small customers. A regulatory decision has been adopted, allowing entrepreneurs and small businesses with low connection capacity to return to the guaranteed supply regime from October 2025, thereby improving price stability and reducing their vulnerability (Elektroprivreda Srbije, 2025[56]).
← 3. The EBRD, with the support of the European Union, launched a new credit line to local financial institutions for on-lending to SMEs under the SME Go Green programme. In its initial phase, the programme provides EUR 120 million in targeted SME financing across the Western Balkans, including Serbia. The programme is supported by grants from the European Union via the IPA under the Western Balkans Investment Framework. The European Union provides a total of EUR 24.94 million (EUR 19.45 million for SME investment incentives and EUR 4.9 million for technical assistance). The funding is fully dedicated to green economy investments, including energy efficiency, resource efficiency, and renewable energy, and also aims to help the agribusiness sector in Serbia reduce its environmental impact and become more sustainable and resilient to the risks of climate change. Another key aspect of the programme is empowering women in business through dedicated funds to support women-led SMEs.
← 4. Selected relevant recommendations include: 1) develop a transparent system of monitoring and evaluating the effects of measures in order to improve the application of the law to boost confidence of SMEs in green investments; 2) increase staff capacity in Elektroprivreda Srbije (EPS) for processing requests and improve communication between EPS and businesses; 3) create subsidies for businesses that invest in training their employees in green skills; 4) reactivate the Green Fund to boost the environmental protection financing system; 5) work on raising awareness among SMEs from the processing industry sector through information activities and promotion of successful business examples.
← 5. A total of 32 digital services for energy and environmental impact assessment procedures were introduced to the eGovernment portal. These activities form part of a two-year EBRD-supported project (2022-2024) on “Digitalisation of administrative procedures to stimulate investments in renewable energy”, implemented in co-operation with the Ministry of Mining and Energy, the Ministry of Environmental Protection, and the Public Policy Secretariat (2024[58]).
← 6. Bank employees now have access to global IFC training programmes, training-of-trainers sessions, and soon, an e-learning platform.
← 7. The duration of the project was extended until the end of the first half of 2027 in order to monitor the effects of support provided to SMEs.
← 8. For more information on these examples, see https://www.economie.gouv.fr/plan-national-relance-resilience-pnrr and https://www.gov.uk/government/collections/energy-entrepeneurs-fund.
← 9. Networks are systems of connected actors that enable the exchange of information, products, services, assets and/or resources. They may be supported by physical infrastructure, formal agreements, or remain informal relationships (OECD, 2023[2]).
← 10. This assumes that governments take deliberate policy efforts to improve the capabilities of small businesses, as innovation activities otherwise tend to be concentrated among larger, leading firms and sectors due to economies of scale and knowledge spillovers (OECD, 2025[59]).
← 11. The SME Hub is hosted by Serbia’s ICT Hub (2026[57]), with support from the Swiss Agency for Development and Co-operation, which aims to make different sources of funding and advisory services more accessible to SMEs in Serbia. Its aim is to enable manufacturing SMEs to access larger, more stable and profitable business-to-business markets with MNCs. The initiative is foreseen within a five-year horizon and budget of over CHF 7 million (Swiss francs) (~EUR 7.62 million), aiming to engage up to 80 SMEs.