EY – Research for and Developing a Strategy for Development Finance

The objective of this project is to identify the potential market failures regarding Serbian SME companies access to financial markets and obtaining funding, thus ascertaining if a ‘finance gap’ truly exists. This occurs when there is a mismatch between the demand and the supply in the different types of financial instruments” (European Court of Auditors, 2012b, p. 6). Yet it is vital to note that a ‘financial gap’ can be classified as market failure only in the eventuality that companies merit the financing, but do not attain it due to the malfunctioning of the market. If the financing is not attained due to sound economic reasoning from the part of the suppliers, this should not qualify as market failure. After gaps are identified it is expected to define the Development Finance Strategy and the Action Plan for implementation of the Strategy.