Serbia’s corporate credit market is moving into a more difficult phase. Companies are asking banks for more money precisely as banks become less willing to take risk, increase lending margins and tighten collateral, maturity and exposure requirements.
The divergence between stronger borrowing demand and more restrictive credit supply is the central message from the National Bank of Serbia’s bank lending survey for the second quarter of 2026. The survey covers 17 banks representing more than 99% of banking-sector assets, making it a useful forward indicator of financing conditions across the Serbian economy.
The headline finding is clear. Serbian banks tightened corporate lending standards during the second quarter and expect further tightening in the third. At the same time, companies increased demand across all major categories of lending and banks expect that demand to continue growing.
That combination does not yet amount to a credit crunch. Banks are still lending and companies are still borrowing. But it represents a significant change in the balance of the market. Access to capital is becoming more selective, the cost of debt is rising and borrowers with weaker balance sheets will increasingly have to compete for bank capacity.
The tightening was unusually broad.
Banks reported more restrictive lending standards for short- and long-term facilities, dinar and foreign-currency loans, SMEs and large companies. Agriculture was the principal exception, with standards for lending to farmers remaining broadly unchanged. Banks expect much the same pattern to continue during the third quarter.
Several forces are driving the change.
Banks cited higher funding costs, reduced competitive pressure within the banking system, increased risk perceptions and lower willingness to take risk. Those factors are expected to remain relevant during the third quarter.
This is important because the tightening extends beyond interest rates.
Banks increased lending margins across corporate loan categories during the second quarter. They also reported tougher conditions on fees and commissions, maximum loan amounts, collateral requirements and maturities for most borrowers. Farmers were again the main exception.
For Serbian companies, that distinction matters.
A business can sometimes absorb an increase of 50 or 100 basis points in borrowing costs if revenues and margins are strong. A simultaneous reduction in maximum leverage, shorter maturity and higher collateral requirements changes the financing equation much more fundamentally.
A project that appeared financeable at 70% debt may no longer work if the bank will provide only 60%. An acquisition can become significantly harder if lenders demand more sponsor equity. A manufacturer planning new capacity may postpone investment if a seven-year facility becomes a five-year facility and annual debt-service requirements rise accordingly.
The Serbian corporate market therefore appears to be moving from a period dominated by the availability of money toward one in which bankability itself becomes the scarce commodity.
Yet the most striking part of the NBS survey is that corporate demand is not falling.
Banks reported stronger demand for every major type of corporate loan during the second quarter. The main drivers were greater financing requirements for capital investment and working capital. Banks expect another increase during the third quarter, led particularly by dinar lending.
The capital-investment component is economically significant.
Companies asking banks to finance machinery, production capacity, logistics facilities, energy systems or other fixed investment are effectively signalling confidence that future demand will justify new expenditure. Strong investment-credit demand is therefore generally more constructive than borrowing driven entirely by refinancing or financial distress.
But the increase in working-capital demand is more ambiguous.
It can be associated with growth as companies finance larger inventories, receivables and production volumes. But it can also emerge when operating costs rise faster than cash generation or when payment periods lengthen.
The survey does not separate those effects. What it does show is that Serbian companies require more liquidity at exactly the moment banks are becoming more conservative.
That creates a potentially important second-half dynamic.
The strongest corporate borrowers are unlikely to face serious access problems. Exporters with euro revenues, industrial companies with predictable cash flows, infrastructure-related businesses with long-term contracts and firms backed by strong sponsors should remain highly financeable.
But the gap between the strongest and weakest borrowers is likely to widen.
Highly leveraged SMEs, companies dependent on volatile domestic demand, speculative real-estate projects and businesses with weak collateral positions are likely to face a very different banking market from that of the strongest corporate names.
Credit pricing therefore risks becoming increasingly segmented.
The most bankable borrowers may still generate competition among lenders even as general standards tighten. Marginal borrowers, by contrast, may find that banks no longer compete primarily on price. Instead, banks can compete on whether they are willing to provide the facility at all.
This is one reason the survey’s finding of reduced bank competition is particularly notable.
When lenders become less aggressive in pursuing new business, the bargaining power of borrowers declines. Companies can no longer assume that refinancing an existing bank with another lender will automatically produce better terms.
That could become particularly visible in refinancing cycles.
Businesses that borrowed aggressively during previous periods of easier credit may now face higher margins, tighter covenants and lower acceptable leverage when facilities mature. Companies unable to inject additional equity could be forced to reduce investment, sell assets or seek alternative sources of financing.
In that sense, the tightening identified by the NBS may affect the corporate economy with a lag.
The second-quarter lending survey measures bank behaviour today, but the strongest effects may emerge as new investments seek financing and existing loans come up for renewal during late 2026 and 2027.
The expected rotation toward dinar borrowing adds another dimension.
Banks expect corporate loan demand to continue increasing in the third quarter, primarily through local-currency financing.
That does not mean euro financing is disappearing from Serbian corporate banking. Large investments, exporters and businesses whose revenues are effectively euro-linked will continue to use euro or euro-indexed facilities extensively.
But stronger demand for dinar lending may reinforce the gradual development of Serbia’s domestic-currency financing market.
For companies whose revenues are primarily in dinars, local-currency borrowing removes currency mismatch. The trade-off is that dinar interest rates can differ materially from euro funding costs. Corporate treasurers will therefore increasingly evaluate the entire risk structure rather than headline borrowing rates alone.
Agriculture stands apart from the wider tightening trend.
The NBS notes that stronger farmer demand was partly supported by subsidised lending provided by international financial institutions and funds.
That is a useful demonstration of what public and multilateral risk-sharing mechanisms can achieve.
Where financing costs are subsidised or risk is shared through guarantee schemes, banks can continue lending even when general risk appetite declines. Similar structures could become increasingly important elsewhere in the economy if credit conditions remain restrictive.
Renewable energy, industrial decarbonisation, export manufacturing, energy efficiency and infrastructure-related investments are all sectors in which IFIs and development institutions could effectively bridge the widening gap between commercial-bank caution and corporate investment demand.
The implications for Serbia’s investment cycle are therefore significant.
The country does not appear to be entering a conventional balance-sheet recession in which companies stop borrowing because they are unwilling to invest. Corporate credit demand remains strong.
Instead, the constraint appears to be emerging on the supply side.
Banks are willing to finance projects, but increasingly on terms that protect capital, liquidity and collateral coverage.
That shifts more responsibility toward shareholders.
Serbian companies undertaking major investments may need to contribute larger equity portions than previously expected. Sponsors may have to provide stronger guarantees. Projects may require more conservative financial models and larger debt-service buffers.
For mergers and acquisitions, this can reduce the leverage available to buyers and therefore affect valuations.
For renewable-energy and infrastructure developers, higher margins and shorter maturities can lower equity returns even when the underlying project economics remain unchanged.
For manufacturers, financing costs could influence decisions on whether to expand domestically, delay investment or use retained earnings instead of bank debt.
For SMEs, the issue can be more fundamental: whether financing remains available at all on commercially viable terms.
Yet the environment also creates opportunities for Serbia’s banking sector and capital markets.
Banks able to assess corporate risk accurately can potentially earn stronger risk-adjusted returns as margins widen. Companies that diversify financing sources can reduce their dependence on traditional bilateral bank lending.
Leasing, factoring, supplier credit, corporate bonds, private debt and IFI-supported financing may therefore become more relevant.
Serbia’s domestic corporate bond market remains small compared with bank financing, but tighter bank conditions are precisely the type of environment that can encourage larger companies to consider capital-market alternatives.
The NBS survey should ultimately be read as an early warning rather than an alarm.
Banks are not withdrawing from corporate lending. There is no indication of broad financial-sector stress. Companies continue to borrow, and banks continue to finance them.
But the terms of engagement have changed.
The second half of 2026 is likely to be defined by a more selective lending market in which banks demand greater compensation for risk at the same time as companies require more capital to finance investment and operations.
The resulting tension between strong corporate credit demand and tightening credit supply could become one of the defining financial trends of Serbia’s economy.
Companies with sound balance sheets, credible investment cases and diversified funding sources should remain well positioned.
Those dependent on cheap leverage will find the market considerably less forgiving.
