At the sitting held on 11 October, the members of the Industry Committee discussed the Republic of Serbia Development Fund Activity Report for the period from 1 January to 30 June 2010.

At the beginning of the sitting, the Fund Director Sladjana Backovic briefly outlined the Activity Report to the Committee members stressing that in the first six months the Fund has run a 6.8 billion RSD profit which represents a 9% increase in balance assets. The Fund placed 13.4 billion RSD, in structure - 6.6 billion from the income and 6.8 billion from the budgetary funds. The highest percentage of funds was placed into the food industry. The highest percentage of funds from the Development Fund went into investing long-term investment loans for legal entities. The budgetary funds were placed into loans for the least developed municipalities with the interest rate ranging from 2 to 3.8% and a 2 to 8-year repayment period. The investment structure was observed in the placement of funds, both by type and development of municipalities, as well as the Fund’s own income, concluded Director Backovic. She also added that 4000 jobs have been opened from the Fund’s placement, and that the opening of Fund branches all over Serbia is currently under preparation.

Debating the Activity Report the Committee members emphasised the comprehensiveness of the Report submitted to the Committee and commended its work. The funds at the Fund’s disposal were assessed as insufficient to stimulate industrial production in Serbia, with some Committee members’ expectation that the Fund might grow into a development bank. The Committee members wanted to know the ratio of requests approved compared to requests submitted, whether it was possible to lower the interest rates for the industry in undeveloped and devastated areas and municipalities, whether it was possible to speed up the processing of requests and simplify the procedure for a start up loan, what the cooperation with the Vojvodina Development Bank was like, as well as how many new jobs have been opened up from the Fund’s placement. The Committee members agreed that it was necessary to initiate an increase of budgetary funds allocated for the Fund, as well as to seek additional funding sources on the international capital market.

The Committee members agreed to consider the Bill amending and modifying the Law on the Development Fund of the Republic of Serbia at the next sitting.

The sitting was chaired by Milorad Buha, Committee Chairman.