Following the conflicts in early nineties and the start of the new century, Serbia is now on transition to a market economy. The under-developed business environment is affecting establishment and growth of the SME sector in Serbia. Deficiencies in the legal framework, access to public services for business, the regulatory environment, institutional capacity, administrative procedures, and infrastructure bottlenecks remain barriers to the development of the private sector.
The unemployment rate in Serbia was 16.8% in the last quarter 2014, with youth unemployment at 26.5%. The SME sector has a large influence on the performance of the Serbian economy accounting for more than 66% of all employees and 58% of its annual turnover. However, the global economic crisis has significantly affected SMEs. It is more difficult for these businesses to reduce their costs, as they are already small. They are individually less diversified in their economic activities and have a weaker financial structure. They often have a low or no credit rating and limited access to specialised and technical services.
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