The Balkans Are Open for Impact
... If Anyone Will Take the First Step
Stand in the right room in Tirana, Belgrade, or Pristina right now, and you will encounter something that feels genuinely new: a generation of social entrepreneurs who are building businesses around causes that matter — education, environmental protection, rural livelihoods, employment for people with disabilities. They are doing so with a seriousness of intent that earlier waves of NGO-sector activism rarely matched. They have theories of change. They have customers, not just beneficiaries. Many of the entrepreneurs are women. Almost all of them are running low on money.
This is the central tension in Mapping the Impact Ecosystem: Insights from the Western Balkans, a new research report produced by Impact Europe in close consultation with Euclid Network, and published in March 2026. Covering eight countries — Albania, Bosnia and Herzegovina, Croatia, Kosovo, Montenegro, North Macedonia, Serbia, and Slovenia — the study was commissioned to establish a baseline for two EU-funded initiatives, Impact Seed and Invest for Change, both of which aim to develop the social enterprise and impact investment ecosystem across the region. It draws on 70 surveys, a focus group with social entrepreneurs, and 18 in-depth interviews with investors and ecosystem stakeholders. The picture it assembles is detailed, honest, and in places quietly alarming.
A sector younger than it looks
The first thing to understand about social entrepreneurship in the Western Balkans is that it is extremely new. Fifty-seven percent of the organisations surveyed were established after 2016. Thirty percent were founded between 2021 and 2025 — during and after the COVID-19 pandemic. Fewer than one in five predate 2010.
This matters because it explains almost everything else in the report. These are not organisations that have had decades to develop financial management systems, investor relationships, or impact measurement frameworks. Many are still consolidating their basic business models. The relative youth of the sector is not a failure of ambition — it is simply a developmental reality, and one that requires a very specific kind of support.
For context, the European Social Enterprise Monitor 2023-24, which surveyed over 1,800 social enterprises across 30 largely EU countries, found that around 36% predate 2010. The Balkans is not just a few years behind; it is operating at a structurally different stage of maturity. That gap is closeable — but not without deliberate effort and appropriate instruments.
Grant dependence: the trap hiding in plain sight
If the report has a single most urgent finding, it is the sector's overwhelming dependence on grant funding — and the degree to which that dependence is self-reinforcing.
Of the 41 organisations that provided data on financial instruments, 27 said that between 76 and 100 percent of their external finance was in the form of grants. Only three used debt financing. One used equity. Impact investors, as a funding source, were cited by just six respondents. Fifty-three percent of organisations operate on less than €50,000 per year.
The comparison with the rest of Europe is sobering. In the ESEM study, trading income was the primary revenue source for close to 75% of respondents; in the Balkans survey, it is a minority of organisations that derive most of their income from sales. More strikingly, among those who sought external financing in the past year, nearly two in five received nothing at all — roughly double the failure rate seen in Western Europe.
Some of this reflects regulatory constraints. Organisations registered as associations or foundations — which make up a significant share of the sector — are simply ineligible for bank loans in several countries.
The response from Impact Seed is direct: create financial instruments specifically calibrated for early-stage social enterprises in the region, with ticket sizes ranging from €20,000 to €1 million, deployed through a consortium of partners with local presence. The theory of change is straightforward — if appropriate capital exists, it will find appropriate borrowers. But the report suggests that the barrier is not only supply. Many organisations lack the financial management and investment readiness to access repayable finance even when it is available. Capital alone is not enough.
What they actually want
One of the most instructive sections of the report asks social enterprises not what they need financially, but what non-financial support would most improve their organisations. The answers reveal a sector that knows, with some precision, what it is missing.
Mentoring and networking topped the list, tied with awareness raising and investor relations — each cited by 22 organisations. Marketing and sales training, financial management and investment readiness, and digitalisation followed closely. Impact measurement and reporting came lower, which is striking given that nearly half of respondents do not currently measure their impact at all. The implication is that entrepreneurs know they need to become more investor-ready; they have not yet fully registered that impact data is part of what makes them so.
This is the demand for what the impact investment field calls "smart capital" — money that comes with mentorship, governance support, market access, and advocacy. It is also, incidentally, a description of what Invest for Change is designed to provide: not just financing, but the ecosystem infrastructure — convenings, peer learning, technical assistance, investor matchmaking — that turns isolated organisations into a connected field.
The supply side: watching and waiting
The 18 interviews with investors, corporations, foundations, and incubators across the region paint a more ambivalent picture. There is genuine interest in social enterprise and impact investment. There is also, almost universally, a reluctance to go first.
The obstacles are partly perceptual. The word "social" in local languages carries connotations of charity and state welfare that are unhelpful for a sector trying to attract commercial attention. Several interviewees noted that "impact enterprise" — a term gaining traction in Croatia and Slovenia — lands better. Investors tend to perceive social enterprises as not sufficiently business-minded, while entrepreneurs tend to distrust investors whose only track record is purely commercial. Both perceptions are grounded in some reality; both are barriers that community-building and demonstrated examples can erode.
The obstacles are also structural. There are no impact investing networks in any of the eight countries studied. The few active angel investors focus mostly on tech and rapid-growth sectors. Venture philanthropy as a concept is virtually unknown. Diaspora investors — a potentially significant source of capital with emotional ties to the region — remain largely unengaged, partly because the local ecosystem has not yet demonstrated the kind of track record that would attract them.
This is sensible analysis. It is also a description of a chicken-and-egg problem that requires someone to break the cycle — and that is precisely the role that projects like Impact Seed and Invest for Change are designed to play.
One region, eight countries, many stories
It would be a mistake to read the Western Balkans as a monolith. The eight countries in this report range from EU member states with relatively developed ecosystems to territories where the concept of social enterprise is still legally undefined. Croatia and Slovenia bring years of European integration. Kosovo operates under constrained sovereignty and faces ongoing political tensions with Serbia, a country that has its own tensions domestically. Bosnia and Herzegovina is gridlocked by ethnic divisions. North Macedonia's accession process has stalled.
This diversity means that no single intervention will work everywhere. The legal frameworks differ. The investor cultures differ. The depth of the existing social enterprise field differs. What the report offers is not a one-size-fits-all prescription but a map of shared challenges — grant dependence, low visibility, absent networks, a lack of diversity in funding instruments and mismatched perceptions — that manifest differently in different places, and a set of recommendations flexible enough to be calibrated to local conditions.
What is consistent across the region, and perhaps the most important finding of all, is the growth orientation of the enterprises themselves. Three in four plan to expand in the coming year. Not a single respondent planned to reduce activities. These are not organisations in survival mode; they are organisations in search of the right conditions to grow. The Balkans social enterprise sector is not waiting to be discovered. It is waiting to be connected.
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Mapping the Impact Ecosystem: Insights from the Western Balkans was produced by Impact Europe, authored by Nazareth Seferian, with research by Nazareth Seferian and Alessio Venturato. It was funded by the European Union as part of the Impact Seed and Invest for Change projects.