Serbia’s capital markets are underdeveloped and businesses rely predominately on bank financing. However, there are strategies and initiatives by the Serbian government and the World Bank in place, aimed to stimulate the growth of capital markets and create new investment opportunities through the issuance of bonds by Serbian corporates.

Private sector financing is a key factor of economic growth  

In most countries, growth is primarily fuelled by investment from private rather than public sources.[1] Serbia’s economic growth, however, predominantly rely on public spending and investment[2]. According to the World Bank, Serbia will need to adapt and diversify its financing sources if it wishes to sustain its economic growth[3]. Currently, private sector financing for investments in Serbia significantly lags behind the average of Western Balkans and CEE.[4] The strengthening of capital markets institutions and encouraging corporates to issue bonds will hopefully boost private sector financing.

Banks loans are not optimal for long term investments

In Serbia, private sector financing is dominated by bank financing.  The banking sector is in good health, with capital adequacy, liquidity levels and NPL levels appearing to be in check. However, banks may not be ideal provider of capital for longer term investments, such as those required in the infrastructure, renewables and other social projects, as loans with longer tenure, create mismatch with the tenure of bank deposits, the majority of which are short-term (up to a year).

The advantage of bond issuance over bank loan is in that it diversifies company’s creditor base (i.e. decreases dependency on one or few financial institutions) and provides access to a number of potential investors. Furthermore, the issuer has more flexibly to adjust the repayment period to the timing of the project. If there is a broad interest from the investors, the issuer can obtain better financing conditions. Finally, bond financing usually does not require a collateral.

Challenges to the development of the bond market in Serbia

While the government bond market in Serbia is functioning relatively well, other segments of the capital market, such as the corporate bond market and the stock exchange, are currently negligible.[5]. Between 2020 and 2024, only 11 companies issued a total of 32 corporate bonds with an aggregate nominal value of EUR 942 million[6], all but one through private placement. Only one corporate issuer, Energoprojekt Holding a.d. Beograd, listed its bonds at the Belgrade Stock Exchange for secondary trading.

Corporate bond market in Serbia faces challenges both on the supply side and on the demand side. On the supply side, only a limited number of companies are now ready to issue corporate bonds largely due to perceived complexity of the issuance procedure when compared to familiar bank financing. On the demand side, the investor base is still very shallow due to limited number of institutional investors, lack of incentives (such as tax incentives) and an overall lack of confidence of retail investors in capital markets.  Currently, the potential investors in corporate bonds are predominantly banks.

Recent strategies and initiatives

With the aim of stimulating growth of capital markets, the Government of Serbia has adopted a comprehensive Capital Markets Development Strategy (CMDS) from 2021 to 2026 and an Action Plan[7]  which aims to foster the development of corporate bond market.

A corresponding effort comes from the World Bank in the form of its “Catalyzing Long Term Finance Through Capital Markets Project”, a EUR 27.7 million loan to support Serbia in developing its corporate bond market and enhancing participation of the private sector in financing investments. The main agenda of the project is to facilitate and enable the issuance of bonds, preferably green, by a few qualified Serbian private companies and streamline and strengthen the regulatory framework for capital markets, regulatory bodies, and the Belgrade Stock Exchange.

The World Bank Project in particularly targets to expand the corporate bond issuer base in Serbia. The project will provide capacity building and technical assistance to the Ministry of Finance in identifying potential issuers and guiding them through the issuance process. It will also provide support in the post-issuance activities, especially for green and thematic bonds. Participating issuers will receive assistance with respect to corporate governance, restructuring, training, auditing, credit ratings, and preparing prospectuses. The program will prioritize firms meeting certain criteria and upon successful issuance, reimburse a portion of their costs incurred. A special incentive will be offered to majority women-owned firms.


Although the goal of establishing a more effective capital market may seem to be a long shot, the World Bank initiative and the corresponding strategy may just prove to be the necessary catalyst for the lift-off of the bond capital market. Provided that all stakeholders stay on the track, we can expect new investments opportunities in the form of RSD-denominated bonds issued by Serbian corporates.



[1]   World Bank, Serbia’s New Growth Agenda – Forging a New Future (CEM) 2019, IMF. Republic of Serbia. Fifth Review Under the Policy Coordination Instrument, January 2021, available at:

[2] World Bank, Report No: PAD4559 – Project Appraisal document on a Proposed Loan in the Amount of EUR 27.7 million to the Republic of Serbia for Catalyzing Long Term Finance Through Capital Markets Project, 22 February 2023, page 5, available at:

[3] Ibid, page 6

[4] Serbia’s private investments average 10.5% of GDP in 2010/2018 compared to average 13.6% in Western Balkans and 16.3 in CEE, Ibid, page 6

[5] World Bank, Republic of Serbia Capital Market Development, Technical Note, February 2019, available at /Technical-Note.pdf

[6] Centralni registar, depo i kliring hartija od vrednosti, available at

[7] See