Serbian banks increased lending to companies and entrepreneurs while reported default ratios remained broadly stable, with corporate credit continuing to expand without a corresponding rise in company defaults. Loans to legal entities reached approximately €20.6 billion, representing a 12.3% year-on-year increase. Lending to entrepreneurs rose 13.6% to around €846 million. The default ratio for legal entities stood at 2.4%, unchanged from both the previous month and the same period a year earlier.
Entrepreneur defaults remain below previous-year level
Entrepreneurs recorded a higher default ratio of 3.4%, compared with 3.3% previously. Despite the monthly increase, the ratio remained below the 4.1% recorded a year earlier. For both legal entities and entrepreneurs, default is measured as matured liabilities remaining unpaid for more than 15 days. The measure therefore covers a broader category than some conventional definitions of non-performing loans.
Combined lending to companies and entrepreneurs reached approximately €21.5 billion, while the available default indicators showed no material deterioration in repayment performance.
Corporate credit expansion continues
The increase in lending has expanded banks’ exposure to the business sector while default ratios have remained relatively contained. The development is relevant to financing across investment, export-oriented industry, infrastructure and energy, where corporate borrowers can use bank credit for new projects and other business requirements. As lending continues to expand, the quality of newly originated loans, borrower leverage, underwriting standards and the purpose of new debt will remain key factors in assessing the development of Serbia’s corporate credit market.
