Rural Financial Sector Development in Serbia

Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)

Partners: Ministry of Agriculture, Forestry and Water Management; National Bank of Serbia; Financial Institutions (Banks, Leasing and Insurance Companies)

Project period: 2012 – app. 2025


  • Underdeveloped access to adequate financing for micro-, small and medium Sized Companies (MSME) and Agriculture households in rural areas of Serbia.
  • Lack of client-orientated financial products and solutions for customers in rural areas.
  • Inconsistency between national rural development strategy and private sector activities.


This project shall improve professional financial services for rural clients in two steps.

Step 1: Developing professional agri-financing in commercial banks (“agri-desks”). These experts are able to assess risks in agri-business adequately and to offer tailor-made financial solutions, which directly respond to the needs of rural clients. The sub-loans to the clients are re-financed by interest subsidized long-term funds extended by KfW in the context of financial cooperation. Those sub-loans are used for investments in farm buildings, purchase of land, husbandry, fodder, machinery or seeds. Moreover, KfW has developed a product combining loans with insurance cover, which optimizes risk management of farms.

Step 2: Extension of the programme in the light of a foreseeable structural change in the upcoming years in Serbia. It is obvious, that a deeper integration of Serbia into the European market will lead to a tougher competition and to an exit of thousands of registered farm households in rural areas. These farms can either invest in professional production or alternative income options. Hence, they will look for adequate financial solutions. KfW therefore widens the programs for rural areas to include the support of banks i) to understand structural changes and ii) to answer the needs of rural clients with adequate financing solutions in suitable sectors, such as construction, provision of services, deliveries and / or logistics.

Until now there is a mismatch between the national rural development strategy and private sector activities. KfW has created in cooperation with the Ministry for Agriculture, Forestry and Water Management a Technical Assistance Platform that shall bind together both political decision makers and private financial institutions into the programme. As there is no state-owned development bank in Serbia, private financial institutions play an essential role for establishing a conclusive strategy for rural areas.

An internationally acknowledged and experienced expert for agri and rural financing was chosen, who supports the process of widening and deepening the market with additional products in close cooperation with the Serbian institutions.


In December 2015, KfW Development Bank signed a Loan Agreement with Banca Intesa on financing Agri-Insurance products. This unique product combines a Credit Loan with Insurance of crops from three basic risks (hail, thunder, fire). The idea of the product is, that the final beneficiary (Farmer) goes to the bank and obtains two products in one contract: Loan and Insurance. If the insured event occurs, the insurance company will repay the loan instead of the farmer. Additionally, the price of this combined product is lower than if the farmer would decide to buy them separately.

By February 28th, 2018, sales officers from 35 branch offices of Banca Intesa managed to disburse in total 590 Agro-Protekt loans, valued at EUR 2.030.725. The average size of a disbursed loan was EUR 3.442.

At the time of this report compilation, there were 27 insurance claims reported.

Banca Intesa and Generali Insurance have signed a new 3-year cooperation contract for AgroProtekt loans. The crops covered under the new agreement remain the same, as well as the insured risks. However, in addition to AP Vojvodina, AgroProtekt loans are now offered in new regions, namely: City of Belgrade, Mačvanski, Kolubarski, Šumadijski, Podunavski, Pomoravski and Braničevski district.


  • New products and financing solutions for agribusiness have been introduced by partner financial institutions in the Serbian market.
  • Clients in rural areas have access to adequate financing solutions.
  • Agricultural enterprises are able to professionalize their business activities and can become more competitive in the international trade market.
  • A dialogue between the partner financial institutions and governmental bodies has commenced with the aim of establishing a conclusive strategy for rural areas.
  • Four Rural Development programmes provided funding in the amount of more than 160 million EUR.
  • Creating 6,000 and saving more than 30,000 jobs.

Implemented by