At the sitting held on 9 April, the Poverty Reduction Committee discussed “Micro-crediting as a poverty reduction mechanism”. The sitting was chaired by Snezana Stojanovic-Plavsic, Committee Chairperson.

Elaborating the topic, Chairperson Stojanovic-Plavsic stressed that the 2003 Poverty Reduction Strategy envisaged micro-crediting as an option for increasing employment. She stressed that Serbia experienced a poverty reduction trend in 2007, but last year that trend was already impaired. With the world economic crisis in mind, an increase of poverty may be expected in Serbia this year, so micro-crediting is one of the ways to confront the consequences of the global crisis in Serbia.

Representative of the International Labour Organisation Office for Central and Eastern Europe Severine Deboos presented a micro-crediting concept the European Union recommends as a poverty reduction mechanism and which has been implemented in Serbia for a few years. The goal of the program is to enable unemployed persons who cannot gain funds through the banks, to use this kind of credit in order to open small firms and set up personal production. That would make it possible to create 260 000 jobs in Serbia by 2012, said Severine Deboos, but that it is necessary to establish the legal framework for the realisation of this concept.

Vice-Governor of the National Bank of Serbia Mira Eric stated that commercial banks in Serbia are already crediting small businesses at favourable interest rates, and that there is a Small Enterprise Development Fund. She deemed it necessary to analyse the effects of using these credits.

The Committee members pointed out that Serbia would have to have an economic development strategy to gain insight into the market demand for certain goods or types of service. They requested information on the justifiability of use of this kind of credit from the National Bank of Serbia.