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The Development Fund of the Republic of Serbia has been established under a special law which was enacted by the National Assembly of the Republic of Serbia on April the 8th 1992. Its basic function is to provide financial support to the development of the vital yet endangered sectors of the Serbian economy. The Fund's Financial Plan for 2005 defines the provisional investments based on the anticipated earnings totalling 5.35 billion dinars. The basic model of using the Fund's funds is the provision of credit.
The right to use these funds can be enjoyed by investors in the territory of the Republic of Serbia, such as:
- legal entities, especially SMEs in private ownership
- joint-stock companies in a majority private ownership
- joint-stock companies in a majority ownership of domestic legal and physical person and limited liability companies
- newly privatized enterprises - for fixed investments only
- legal entities - exporters
- private crafts shops and entrepreneurs oriented to production and service, as well as traditional crafts
- physical person registered with the National Employment Service (for micro-credits).
The basic aim of the Fund is the development of underdeveloped regions and ethnically mixed communities through:
- crediting the establishment, start-up and development of small and medium-sized enterprises and private shops
- crediting new programmes for the reconstruction and modernization of small and medium-sized enterprises and for durable working assets.
Priority in the use of these funds is given to:
- investment programmes in the field og industry, agricultural processing plants and related services
- programmes which are carried out in the municipalities whose corrected national income per capita does not exceed 50% of the average in the Republic of Serbia in the last year for which the statistical data is available, as well as in the devastated regions of the Republic of Serbia
- programmes providing for the higher level of projected profitability, that is greater economic effects per unit of capital invested and faster return of investment
- programmes providing for the creation of new jobs and greater net foreign exchange effects
- programmes which do not require new investments in the construction of building projects
- programmes designed to spur the development of spa and mountain tourism or, more specifically, of eco and rural tourism
- programmes which, with other conditions being equal, have a higher share of own funds and the share of other sources in the structure of financing relative to the Fund's fonds.
Credit will be granted to a group of small and medium-sized enterprises for the following purposes:
- investing in new programmes
- technical-technological modernization
- investing in durable working assets so as to stimulate production and better capacity utilization
- finding new markets and reorientation to export programmes.
The Fund is directly oriented towards encouraging export-oriented programmes by granting short-term credits for financing the preparation of production intended for export, on the basis of the concluded export contracts. Priority in the use of its funds will be given to export programmes which ensure higher net foreign exchange earnings per unit of invested amount of credit.
Encouraging employment by granting micro-credits under the employment programme to workers who have lost their jobs in the transition process - credits will be granted to the amount of the funds to be provided by the National Employment Service.
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