The Role of Microfinance in Development of SMEs in Republic of Serbia

The importance of microfinance is in availability of funding business for those segments of the population with difficult access to conventional means of business financing from banking sector. Microfinance represents a way of funding which can create new jobs and reduce the proportion of socially vulnerable population. The existing model of microfinance in Serbia has a limiting effect on its efficient operation and satisfaction of demand for micro credits. The paper aims to point out the importance of microfinance as a support for the development of SMEs in the Republic of Serbia. A research subject is current economic development, characteristics of the SME sector, legislative framework on the microfinance, government program for supporting microfinance, major microfinance institutions in Serbia and national models of microfinance.