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Europe, Middle East & North Africa

Supporting agribusiness, creating jobs in Serbia

Agriculture is the most important economic sector and a primary source of employment in most emerging markets. In Serbia, where almost half the population lives in rural areas, revitalizing agribusiness is essential for creating jobs and reducing an unemployment rate that has crossed 20 percent.


The potential is vast. Strong global demand for food is creating new markets for Serbian agribusiness companies. In 2011, Serbia’s agricultural exports increased five-fold. Now exporters need investment to continue expanding, yet capital has been scarce since the financial crisis.


IFC is helping Serbian companies convince skeptical investors that they offer good opportunities for profitable business. Recent IFC transactions have provided more than €250 million in direct financing for Serbian agribusiness companies, aiming to improve corporate governance and introduce new standards in order to reach lucrative new markets.


In February 2013, IFC provided a €57 million loan to Victoria Group, an 1800-employee corporation focused primarily on grain trading and the processing of soybean and sunflower seeds. The funds will be used by the group's four core companies, Victoria Oil, Sojaprotein, Victoria Logistics, and Fertil, and to provide financing to farmers who supply seeds to Victoria Group.


In June 2012, IFC lent €45 million to MK Group—the leading agribusiness conglomerate focused on primary agriculture and meat processing. This company employs more than 5,000 people in Serbia and Ukraine. “This loan demonstrates the confidence of one of the world’s leading financial institutions in our business strategy,” said Miodrag Kostic, President of MK Group.


Last year, IFC also extended a €40 million loan to Koncern Farmakom MB, which employs more than 3,000 people. IFC arranged additional financing of €80 million from other lenders—the largest syndication deal that year in Southeast Europe.


Although these companies employ thousands, SMEs make up most of Serbia’s agribusiness supply chain and offer great potential for job growth. For example, a €12.5 million IFC loan will help Serbian beverage maker Vino Zupa improve its operations and environmental and social standards while supporting a sizable network of local suppliers.


“Fruit production is a major employment generator in my region,” said Vino Zupa CEO Rade Jevtovic. “We have strong links to more than 14,000 fruit farmers, retailers, and other small companies.”


Meanwhile, IFC is working with Serbian banks to increase access to finance for small agribusinesses and farmers. IFC has provided Société Générale Srbija with €110 million in loans. UniCredit and ProCredit Leasing have also benefited from IFC financing.

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