Serbia’s credit market expanded in early 2026, but lending trends are developing along different paths for households and companies. Consumer and housing borrowing accelerated, while corporate financing remained focused on working capital and investment loans with a continued high dependence on euro-linked borrowing.
Corporate lending increased by RSD27bn in the first quarter of 2026, excluding exchange-rate effects, raising the total stock to approximately 18.2 per cent of GDP. Annual growth was supported by a 13.5 per cent increase in working-capital and liquidity loans and a 12.5 per cent rise in investment lending.
Corporate borrowing remains concentrated in operational financing
Working-capital facilities represented 47.9 per cent of total corporate credit, while investment loans accounted for 42.7 per cent. The structure is relatively balanced compared with banking markets where short-term liquidity financing dominates, although the data do not indicate how much investment lending is directed toward new productive capacity versus replacement of existing equipment.
New corporate loans totalled RSD289.1bn during the first quarter, down 1.1 per cent compared with the same period a year earlier. Around two-thirds of new corporate financing was allocated to working capital, while investment loans accounted for 21 per cent. Micro, small and medium-sized enterprises received 74 per cent of newly issued investment loans and represented 60.6 per cent of the outstanding corporate loan portfolio.
The maturity profile of corporate borrowing remained relatively favourable, with 83.5 per cent of loans having an original maturity longer than one year. Demand differed across sectors. Borrowing increased in transport, construction and trade, while companies in manufacturing and agriculture reduced their loan exposure during the quarter.
Foreign-currency exposure remains a key corporate risk
Currency structure continues to represent the main vulnerability in corporate lending. Only 22.8 per cent of corporate loans were denominated in dinars, leaving more than three-quarters linked to foreign currency, primarily the euro. Around 81 per cent of foreign-currency and foreign-currency-indexed corporate loans were connected to Euribor, mainly the three-month benchmark rate.
The structure benefited borrowers as the European Central Bank’s easing cycle reduced money-market rates. Companies remain exposed to changes in euro interest rates and potential currency mismatches when revenues are primarily earned in dinars. The stability of Serbia’s managed exchange-rate regime has limited realised losses, but it has not removed the underlying exposure.
New dinar-denominated corporate loans carried an average interest rate of approximately 6.8 per cent in the first quarter. Working-capital loans averaged 6.5 per cent, while investment loans averaged 8.5 per cent. Euro and euro-indexed corporate loans averaged 4.9 per cent, including 4.8 per cent for working-capital financing and 5.2 per cent for investment loans.
Borrowing costs vary by company size
Loan pricing differed significantly depending on company size. Average euro borrowing costs were approximately 4.6 per cent for large companies, 4.8 per cent for medium-sized firms, 5.1 per cent for small businesses, and 6.2 per cent for microenterprises. The differences reflect variations in credit risk, collateral availability and negotiating power between borrower groups.
Corporate credit quality remained strong. The corporate non-performing loan ratio stood at 1.4 per cent, including 1.6 per cent for companies. Real-estate businesses recorded an NPL ratio of 0.2 per cent, while manufacturing companies had a higher ratio of 2.8 per cent, although still at historically low levels.
Household credit expands through cash and housing loans
Household lending grew faster than corporate borrowing, with the total stock reaching RSD2.01tn at the end of March 2026, equivalent to 19.1 per cent of GDP and almost half of banks’ claims on the domestic non-monetary sector. Household loans increased by RSD72.3bn during the quarter, driven by RSD40bn in cash loans and RSD25.9bn in housing loans.
Cash loans accounted for 47.7 per cent of household credit, while housing loans represented 38.1 per cent. Outstanding balances increased 24 per cent year on year for cash loans and 20.2 per cent for housing loans. The state-supported housing programme for young borrowers contributed slightly less than half of the quarterly increase in mortgage lending.
Unlike corporate borrowers, households rely primarily on dinar-denominated loans. Household loan dinarisation reached 56.5 per cent in March and approximately 56.8 per cent by May. At the same time, 76.8 per cent of newly approved household loans were issued in dinars. This reduces direct currency exposure, although housing loans remain largely euro-indexed and sensitive to Euribor movements.
Domestic banks replace part of external corporate financing
The Serbian banking sector has continued financing both investment and consumption without a visible deterioration in loan quality. Corporate investment lending can contribute to productive capacity expansion, while rapid growth in cash loans is more closely linked to household consumption and imports. Subsidised housing financing can improve access to property but may also influence prices when housing supply is limited.
External borrowing patterns show a shift in financing sources. Serbia recorded net repayments of €813mn on financial loans between January and May 2026. Companies repaid €1.3bn net to foreign creditors, while banks recorded €311mn of net borrowing and the government recorded €198mn.
Domestic banks are therefore replacing part of the direct external financing previously used by companies. With low non-performing loans, strong deposit funding and lower benchmark interest rates, Serbian banks retain capacity to expand lending. The allocation of that credit will determine whether future growth is directed more toward export-oriented investment and productivity improvements or toward consumption, property financing and short-term corporate liquidity.
