Serbian businesses are facing a renewed increase in borrowing costs, with the average interest rate on newly approved dinar-denominated corporate loans reaching 7.9% in September 2026, despite the National Bank of Serbia keeping its benchmark rate unchanged at 5.75%.
- New lending rates approach pre-easing levels
- Euro loans remain significantly cheaper
- Higher financing costs affect industrial investment
- Working capital and payment cycles under pressure
- Lending rates rise as corporate deposit costs decline
- SMEs face more limited financing options
- Corporate financing conditions shape 2027 budgets
The September rate increased by 0.2 percentage points from August and stood just 0.2 percentage points below the 8.1% recorded in June 2024, when the central bank began easing monetary policy. At the end of 2025, companies were borrowing in dinars at an average rate of approximately 6.5%.
The increase amounts to around 1.4 percentage points over nine months, indicating that the cost of new corporate financing has risen even without further monetary tightening. For manufacturers, construction contractors and smaller businesses relying on bank credit, higher rates affect investment calculations, inventory financing, production costs and debt refinancing.
New lending rates approach pre-easing levels
The latest figures reverse part of the improvement following the National Bank of Serbia’s monetary easing in 2024. The reference rate was reduced from 6.25% to 6.00% in June, followed by a further cut to 5.75% in July.
The current figures apply to newly approved loans rather than the entire stock of outstanding corporate debt. Companies with fixed-rate facilities are not automatically affected, while businesses refinancing maturing loans, arranging new credit or borrowing at floating rates may face higher costs, depending on their contractual terms.
The weighted average can also change according to the composition of borrowers and loan products. Consequently, the increase does not establish that every bank has raised its lending rates by the same amount. Nevertheless, the latest level indicates that the benefits of earlier monetary easing are no longer fully reflected in the cost of new dinar financing.
Euro loans remain significantly cheaper
The average interest rate on newly approved euro-denominated corporate loans remained at 5.5% in September, leaving a 2.4-percentage-point gap compared with dinar lending. The difference may encourage companies to consider borrowing in euros, particularly exporters and businesses with stable euro-denominated revenues or contracts.
Companies earning primarily in dinars face currency exposure when servicing euro debt. Any depreciation of the dinar would increase the domestic-currency value of repayments and could reduce the benefit of the lower interest rate.
Export-oriented manufacturers may be better positioned to manage this exposure through natural currency hedging, while businesses focused on the domestic market have fewer such protections. Financing decisions therefore depend on revenue currency, loan maturity, interest-rate structure and the borrower’s capacity to absorb changes in exchange rates and borrowing costs.
Higher financing costs affect industrial investment
The increase in borrowing rates also changes the economics of planned capital expenditure. Manufacturers assessing new production lines, machinery, automation and energy-efficiency projects must account for financing costs over several years. Higher interest rates reduce the net present value of expected project cash flows and increase the return required to justify investment.
A company borrowing the equivalent of €2 million at 7.9% rather than 6.5% would incur approximately €28,000 in additional annual interest, assuming the full principal remained outstanding throughout the year and all other loan terms were unchanged. This is an illustrative calculation, not a comparison of specific lending offers. For larger projects involving factory construction, equipment upgrades or industrial utility systems, the difference can be considerably greater. Projects with strong margins and short payback periods may remain viable, while investments dependent on narrow margins, uncertain demand or extended construction periods face greater pressure. Higher financing costs may lead companies to postpone capital expenditure, reduce project scope or prioritise investments that deliver immediate operating savings.
Working capital and payment cycles under pressure
The cost of borrowing is also relevant to day-to-day operations. Manufacturers often use credit to finance raw materials, inventories, wages and receivables before customers settle their invoices. Construction and engineering contractors face similar requirements when purchasing equipment, mobilising subcontractors and completing work before reaching contractual payment milestones.
Higher rates increase the cost of maintaining these financing arrangements, particularly for companies with long collection periods or substantial inventories. Businesses operating under fixed-price contracts may be unable to transfer additional financing costs to customers.
Industrial suppliers and infrastructure subcontractors could also face greater pressure when clients delay payments or project schedules are extended. Banks, in turn, may place greater emphasis on cash-flow quality, customer concentration and debt-service capacity when assessing applications.
Lending rates rise as corporate deposit costs decline
Bank funding costs, borrower credit quality, capital requirements, competition, liquidity and expected credit-portfolio performance all influence lending prices.
The average interest rate on newly accepted dinar corporate deposits declined slightly to 5.2% in September, while the rate on new euro corporate deposits fell to 2.9%.
The simultaneous increase in dinar lending rates and decline in deposit rates suggests that changes in deposit pricing alone do not explain the movement in corporate borrowing costs. However, lending and deposit averages cover different maturities, products, customer groups and balance-sheet exposures, so they cannot be treated as directly comparable measures of bank profitability.
The National Bank of Serbia also tightened certain capital-buffer requirements for systemically important banks during 2026, reflecting the expansion of credit activity. Although additional regulatory capital can affect lending economics, the aggregate figures do not establish how much of the increase in corporate rates resulted from these requirements. A fuller assessment would require data on lending margins by loan category, maturities, credit-risk premiums, borrower concentration and competition between banks. Changes in the composition of newly approved loans would also need to be considered.
SMEs face more limited financing options
Small and medium-sized enterprises may be particularly exposed because they generally have less access to capital markets, shareholder funding and international credit facilities than larger corporations. Smaller industrial suppliers and contractors may also have limited collateral and weaker negotiating power when arranging bank loans. Higher borrowing costs can therefore widen the financing gap between well-capitalised companies and smaller domestic businesses.
International financial institutions are using risk-sharing arrangements to expand access to credit. The European Bank for Reconstruction and Development’s €35 million guarantee agreement with Raiffeisen Bank Serbia, designed to support up to €70 million in new SME lending, is one such mechanism.
Credit guarantees can help banks finance businesses facing collateral or credit-risk constraints. However, they do not automatically reduce interest rates for all borrowers or lower financing costs across the wider economy. Their impact depends on eligibility criteria, actual disbursements, loan pricing and the extent to which they support investment that would otherwise not take place.
Corporate financing conditions shape 2027 budgets
With the benchmark rate unchanged but the average cost of new dinar corporate loans significantly higher, Serbian companies face uncertainty when preparing investment and financing plans for 2027. If borrowing rates remain elevated, businesses may increasingly consider euro financing, reduce their reliance on credit, renegotiate payment terms or defer discretionary investment.
Banks will need to balance credit growth against loan quality, refinancing exposure and currency risks among borrowers. For policymakers, the development raises questions about whether financing conditions remain supportive of productive private-sector investment. Further monthly lending data will indicate whether September’s 7.9% average dinar rate reflects a temporary change in the composition of new loans or a more sustained tightening of commercial credit conditions.
