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Starting from Scratch: Supporting Small and Medium Enterprises from the Ground Up in Bosnia and Herzegovina

March 8, 2013

World Bank Group

  • Altijana Dzombic is a female entrepreneur who started a business with support from the Enhancing Small and Medium Enterprise (SME) Access to Financing Project.
  • Altijana’s bakery is one of 110 SMEs which has benefited from the project.
  • It is estimated that the project has created 1,120 jobs in Bosnia and Herzegovina and saved an additional 4,000 jobs.


Altijana Dzombic owns a small bakery in Sarajevo, Bosnia and Herzegovina (BH). This bakery, which started as an idea in 2004, has grown into a thriving small business which now employs 26 people. Dzombic’s business is one of the first enterprises which has benefited from the Enhancing Small and Medium Enterprise (SME) Access to Financing Project – designed to help people like Altijana secure funds for their businesses in a country which struggles to sustain SMEs.   

“We invested in the construction of the building…we bought some equipment….and we bought one vehicle for delivering cakes in Sarajevo,” explains Dzombic. “In the beginning I started working with one girl for a year. Then we started hiring other people.”

This business is one of more than a hundred SMEs benefitting from the Enhancing SME Access to Financing Project, which has been helping entrepreneurs in Bosnia and Herzegovina since 2010. The $70 million project provides loans through the Ministry of Finance in BH to small and medium enterprises which meet strict borrowing standards. Over the last three years, it is estimated that 4,000 jobs have been saved and more than 1,100 jobs have been created as a result of this project.     

" Production is the future for any country. We need a balance between imports and exports. For 15 years we imported everything…now people have started making [their own goods] "

Altijana Dzombic

small business owner, Sarajevo

With a relatively stunted enterprise sector, the need for these types of projects is particularly acute in Bosnia and Herzegovina. With less than 10 SMEs per 1,000 people, the country lags behind many of its regional neighbors and the lack of access to credit for SMEs has been identified as a major impediment to growth in the sector. Declining availability of working capital, medium term investment financing, and liquidity in recent years have also slowed growth in the country’s enterprise sector. Falling domestic consumption – coupled with decreasing exports – has made it increasingly more difficult for people like Altijana Dzombic to secure financing to start or expand a small or medium enterprise in the country.

Recognizing the economic consequences of these difficulties in the enterprise sector has prompted the authorities in Bosnia and Herzegovina to prioritize growth in this area through the introduction of various reforms in the country’s business environment and the implementation of programs such as the SME Access to Financing Project. The pace of these reforms, however, remains slow and the business environment in BH remains one of the most unfriendly in the region. A large and complex public administration and layers of administrative approval have coupled with a negative growth rate in recent years, resulting in increases in interest rates and decreases in consumption – further hampering the business environment for small business owners and increasing the importance of programs like the Enhancing SME Access to Financing Project.

“Production is the future for any country,” says Dzombic, who spent several weeks in Italy learning the techniques of making chocolate, “we need a balance between imports and exports. For 15 years we imported everything…now people have started making [their own goods] – it’s step by step but they are hiring people and using domestic products.”

With the continued implementation of projects such as the SME Access to Financing Project and ongoing reform of the business climate, the government of Bosnia and Herzegovina is working to ensure that these steps continue well into the future.