EXTERNAL FINANCING OF SMEs IN SERBIA

Abstract

Considering the fact that small and medium
enterprises often face funding difficulties, this paper discusses
and analyzes the issue of financing SMEs in Serbia, i.e. the
usage and possibilities of alternative, relatively more affordable,
cheaper and more flexible options for financing entrepreneurial
projects, which are available in practice. The research was
conducted by surveying entrepreneurs and SME owners, in
order to show the extent to which SMEs in practice rely on their
own financing of their business, and how much is represented by
financing from external non-banking sources. Also, the paper
investigates and analyzes the level of satisfaction of
entrepreneurs with the current usage of various financial
instruments that they can access in different circumstances, as
well as potential opportunities for their usage, with a focus on
the current state of SME financing in practice. The obtained
results indicate that entrepreneurs mostly rely on own financing
of their business, that various options of non-bank financing are
insufficient and that there is a lot of untapped potential.
However, there is a need for more simplified procedures and
better informedness of entrepreneurs.