EBRD, AikBank Launch Serbia’s First Dinar-Based Factoring Facility

The European Bank for Reconstruction and Development (EBRD) has approved a €30 million revolving factoring facility for AikBank, creating the first local-currency transaction in Serbia completed under the EBRD’s Trade Facilitation Programme.

Although the facility is calculated at a euro-equivalent value, financing will be provided in Serbian dinars, giving domestic companies access to approximately RSD 3.5 billion in working-capital liquidity without additional foreign-exchange exposure. The structure is designed for companies whose revenues, supplier obligations, wages and operating expenses are primarily denominated in dinars. AikBank has already allocated the full facility to domestic factoring transactions, indicating demand among Serbian companies for short-term liquidity solutions linked directly to commercial invoices.

Factoring facility targets short-term corporate liquidity needs

Factoring enables companies to convert unpaid invoices into immediate cash instead of waiting for customers to complete payment cycles that may extend for 30, 60 or 90 days. Under the arrangement, a supplier transfers or assigns receivables to the bank and receives most of the invoice value upfront. The company can then use the funds for payroll, material purchases, inventory replenishment or accepting additional orders without increasing pressure on existing cash reserves.

The financing mechanism addresses a common challenge among smaller suppliers serving larger manufacturers, retailers, infrastructure contractors and export-oriented companies. Businesses can remain profitable while experiencing liquidity pressure when the period between delivering goods and receiving payment becomes extended. Factoring focuses on closing this timing gap rather than financing long-term investment projects.

Revolving structure increases financing capacity

The revolving nature of the EBRD facility allows funds to be reused as financed invoices are collected. The total economic impact of the facility can therefore exceed the initial €30 million amount, depending on receivable maturity periods, utilisation levels, customer eligibility and credit-risk limits. A facility supporting invoices with an average maturity of approximately 60 days, for example, could theoretically finance a larger annual transaction volume through repeated cycles.

AikBank will distribute the financing through its newly introduced digital factoring platform, which is designed to accelerate invoice submission, receivable verification, approval procedures and fund disbursement. Digital processing also creates a more structured record connecting suppliers, invoices, buyers, delivery documentation and payment status. For smaller companies, the platform can reduce administrative barriers that have traditionally limited access to factoring services and make receivables finance a regular working-capital tool rather than an emergency liquidity measure.

Local-currency financing reduces exchange-rate exposure

The dinar component represents a significant element of the transaction for Serbia’s financial market. Companies generating revenue in dinars often face a choice between local-currency borrowing, which may carry higher costs, and euro-linked financing, which can introduce foreign-exchange risk. While euro financing may appear cheaper, currency movements can increase the effective cost of repayment when income remains in dinars.

The EBRD–AikBank structure aligns financing currency with receivable currency. A Serbian supplier issuing dinar invoices can obtain dinar liquidity and repay the factoring advance from the same currency cash flow. The facility also supports the broader objective of increasing dinarisation of Serbia’s financial system, a policy area supported by the National Bank of Serbia.

Although Serbia has expanded local-currency deposits and lending, corporate financing remains significantly exposed to euro-denominated and euro-indexed obligations. Institutional dinar funding allows banks to develop local-currency products while limiting currency mismatches.

Factoring supports industrial supplier networks

Receivables-based financing is particularly relevant for Serbian companies integrated into domestic and international industrial supply chains. Serbian manufacturers frequently supply multinational companies operating in sectors including automotive, electrical equipment, machinery, food processing, construction materials and retail. Large buyers may have strong credit profiles but often require suppliers to accept longer payment terms. As a result, smaller companies can hold high-quality receivables while lacking the liquidity needed to finance new production cycles.

Factoring allows financing decisions to consider the quality of the underlying invoice and the buyer’s ability to pay rather than relying only on the supplier’s balance sheet or available collateral. This can expand financing access for companies with strong order books but limited fixed assets available for pledging. Unlike traditional lending, which often depends on property, equipment or guarantees, receivables financing uses commercial assets created through normal business activity.

Supply-chain finance gains importance amid cost pressures

The facility may also strengthen relationships between large companies and their supplier networks through factoring and reverse-factoring structures. Suppliers receive payments earlier, buyers maintain agreed procurement terms, and banks manage financing and settlement processes. Supply-chain finance becomes increasingly relevant during periods of higher input costs, volatile energy prices or slower customer payments.

Companies can remain profitable while facing cash constraints because more capital becomes tied up in inventories and receivables. Rising raw material costs can increase invoice values and working-capital requirements even without higher production volumes.

Development-bank financing expands beyond investment projects

The EBRD transaction represents a move by institutional lenders into operational financing infrastructure for Serbian companies. Development-bank support has traditionally focused on areas such as capital expenditure, energy efficiency, renewable energy, environmental investments and SME lending programmes.

The AikBank facility addresses the shorter corporate financing cycle between production, invoicing and payment collection. For smaller businesses, this period can determine whether growth opportunities can be realised. Companies may have confirmed contracts and increasing revenues but still lack funds for materials and labour required for the next production cycle. By unlocking cash held in receivables, factoring enables growth to be supported by completed sales rather than repeated increases in conventional borrowing.

The full allocation of the facility indicates that demand for receivables finance in Serbia extends beyond a single €30 million credit line. The transaction provides information on invoice volumes, maturity periods, sector concentration and repayment performance, potentially supporting future expansion of similar products.

AikBank expands corporate financing services

For AikBank, the facility strengthens its corporate-banking offering following the consolidation that created one of Serbia’s larger domestic financial institutions. Factoring combines elements of payments, lending and supply-chain management, allowing the bank to deepen relationships with corporate buyers and their SME supplier networks. The risk profile differs from unsecured working-capital lending.

Banks providing factoring services must verify that invoices are genuine, goods or services have been delivered, buyers have accepted payment obligations and receivables have not previously been assigned. Portfolio concentration is also an important consideration. A factoring portfolio may appear diversified across suppliers while still depending heavily on a limited number of major buyers. Digital systems can reduce operational risks but do not eliminate the need for controls covering invoice duplication, disputes, credit notes, contractual set-off rights, delivery records and buyer confirmations.

Working-capital finance supports corporate investment capacity

Serbian companies are facing increasing pressure to improve working-capital management as supply chains become more complex. Export-oriented manufacturers must finance longer production cycles, while domestic suppliers face changing labour costs, energy-price pressures and additional documentation requirements from multinational customers.

Companies connected to European markets are also investing in environmental reporting, traceability and carbon-management systems. Dinar factoring cannot replace long-term industrial financing, but it can prevent daily liquidity requirements from reducing borrowing capacity available for machinery, digitalisation, energy efficiency and expansion projects. Separating invoice financing from investment borrowing allows companies to match financing structures with business needs: short-term receivables support operating expenses, while longer-term facilities remain available for productive investments.

The €30 million EBRD–AikBank facility represents a new model combining development-bank funding, local-currency financing, digital distribution and receivables-based lending around the cash-flow cycle of Serbian companies. The immediate utilisation of the full facility demonstrates demand for financing solutions connected directly to invoices, payments and goods moving through domestic supply chains.