Serbian companies increased their use of bank financing in July 2026, with corporate lending growing 11.6% year on year as investment borrowing expanded faster than loans for liquidity and working capital. Data from the National Bank of Serbia (NBS) show that investment loans rose 16.5%, compared with an 11.0% increase in financing for liquidity and working capital. The different growth rates point to a larger share of corporate borrowing being directed toward longer-term business activity rather than immediate cash-flow requirements.
Investment financing gains momentum
The structure of credit growth provides an indication of how companies are using additional financing. Faster expansion in short-term liquidity borrowing can be associated with greater pressure on corporate cash flows, while investment lending supports expenditure on equipment, production capacity and longer-term projects. The increase in investment loans comes as Serbia remains in a significant infrastructure and construction investment cycle. Manufacturing companies are also expanding production capacity, while export-oriented investment continues.
Financing conditions have eased from the highest levels reached during the monetary tightening cycle, although borrowing costs remain significant.
Corporate borrowing costs remain elevated
Newly approved dinar corporate loans carried an average interest rate of 7.4% in July, while loans denominated in euros or indexed to the euro averaged 5.2%. The lower rate on euro-linked financing helps explain its continued attractiveness for companies generating euro revenues or holding other natural currency hedges. Corporate investment lending has nevertheless accelerated while the NBS benchmark rate remains at 5.75%, indicating that companies are increasing capital expenditure without waiting for a substantially stronger easing in monetary conditions. For businesses using euro financing, borrowing costs of around 5% remain before margins, fees and project-specific risk premiums are taken into account.
Banks face the question of credit quality
The expansion of corporate lending is taking place alongside relatively strong banking-sector asset-quality indicators. The overall non-performing loan ratio stood at just 1.98% in July, although the figure includes both corporate and household lending.
For Serbian companies, financing conditions are therefore easier than during the peak of the interest-rate cycle, but borrowing is not exceptionally inexpensive. The ability of new investment projects to generate sufficient cash flow once they become operational will remain relevant to the performance of corporate credit portfolios.
Domestic banks join wider investment financing
The 16.5% increase in investment lending indicates that Serbia’s investment cycle is being financed not only through government capital spending and foreign direct investment but also through domestic bank balance sheets. This broader financing base is supporting corporate expenditure in areas including automation, energy projects, industrial upgrades and new export capacity.
