Capital markets are a critical yet underutilised lever for strengthening private sector development in Bosnia and Herzegovina. In an economy where access to finance remains a key constraint, particularly for small and medium-sized enterprises (SMEs), developing market-based sources of finance offers an important opportunity to diversify funding, support innovation and enable firms to scale. However, capital markets in Bosnia and Herzegovina remain shallow and fragmented, limiting their ability to effectively serve the needs of a modern, growth-oriented private sector.
This policy note, developed under the EU for Private Sector Development in Bosnia and Herzegovina, examines the current state of capital markets in Bosnia and Herzegovina, highlighting key structural challenges in leveraging them to enhance businesses’ access to finance. Drawing on OECD analysis and stakeholder consultations, it identifies priority areas for reform and outlines several policy recommendations to support integrated, inclusive and functional capital markets.