City of Belgrade helps female entrepreneurs with RSD 4.5 million – New financial support programs needed for female entrepreneurship development

Belgrade-based company Ozon Ekspres will invest RSD 498,500, provided by the city of Belgrade, in procurement of a Hagspiel ironing machine. The laundry shop from Palilula is the only company for which funds were approved at the public call for support to development of female entrepreneurship.

The city had set aside a total of RSD 5 million for improving production and expanding capacities to the end of development of micro, small and medium enterprises owned by women, and there were 29 bids.

As the Secretariat for Economy said for our portal, undue, incomplete and otherwise irregular bids (sent by fax or email, for example) and those sent to other addresses, hadn't been considered. Furthermore, it was not allowed to amend incomplete documentation. Only one bid came with complete documentation, and the list published on the city's website clearly shows which documents each bidder failed to provide.

Only micro, small and medium enterprises owned by women with a minimum 60% share in the company's capital were allowed to participate, as were female entrepreneurs.

Since only one bid at the public call placed on June 8 has proven to be valid, the Secretariat for Economy will, as we learn, place a new public call until the funds in the amount of RSD 4,501,500 have been used, following the completion of required procedures.

Sustainability of female entrepreneurship

The participation of female entrepreneurs in Serbia matches the European average of around 30%, whereas the rate at which women-owned enterprises are liquidated is slightly higher, around 47%, and is to a large extent a reflection of problems that female entrepreneurs face, first in founding and then maintaining an enterprise, at least at status quo. For this reason, all programs of support to female entrepreneurship are important and welcome.

The Association of Business Women of Serbia agrees. Since most women-owned enterprises are micro enterprises, the funds received can help them solve a problem, buy a smaller piece of equipment, redesign a product or packaging etc. Nevertheless, such programs are not a solution for certain larger developmental needs.

The lack of sources of finance has been perceived as one of the key obstacles to further development of female entrepreneurship for some time now, and considering that many companies are facing the problem of refinancing loans and that this often puts in question the survival of companies which operate for more than 10 years, the Association believes that new programs should be created in this area to help the companies continue their operations uninterrupted, which can also lead to their development and new employments.

– It's important the the new law on microfinance is being prepared, which should enable all those companies which are below the radar of commercial banks to get the necessary funds under more favorable conditions. Micro loans can go up to EUR 25,000, which is a sum that allows for purchase of a production machine, adaptation of a facility or anything that could act as an incentive for improving the business – says the president of the Association, Sanja Popovic Pantic.

Our interviewee adds that government subsidies are most often smaller than these amounts, but that they can also be of help in certain moments during the development stage. Still, it's not realistic to expect that they could positively impact the advancement of the SME sector or employment to a great extent.

– Such programs should always be combined with financial policy measures, since it's easier to produce the desired effects through synergy. Unfortunately, such synchronization rarely happens in Serbia as a rule, which is why good intentions don't produce true results, as they are only partial.

Nevertheless, Popovic Pantic reminds that a lot of good programs of support to entrepreneurship have been carried out since early 2016, aiding both startups and developing companies in need of additional incentives.

The list of current programs, along with funds and application deadlines, can be seen at www.godinapreduzetnistva.rs.

Non-financial aid

In order to stimulate economic empowerment of women and to familiarize them with various available financial support programs, seven workshops called Support to Female Entrepreneurship (Zrenjanin, Uzice, Leskovac, Kraljevo, Sabac, Zajecar and Sombor) have been organized since early 2016. The gatherings organized by the Chamber of Commerce and Industry of Serbia in cooperation with the Association of Business Women of Serbia, the Development Fund of the Republic of Serbia and the Development Agency of Serbia were attended by more than 400 female entrepreneurs, which shows that such non-financial aid and mentorship programs are equally useful to women-owned entreprises.

This is confirmed by the fact that 66% of female entrepreneurs in Serbia start a business out of necessity, and 34% of them due to entrepreneurial challenges and personal affinities, whereas in the EU, it's the other way around.

I.B.