Since small and medium sized enterprises (below: SMEs) represent an important segment of the economy of developed countries, great efforts and substantial resources are invested in the promotion and development of the same. In the Croatian economy, the important role of creating incentive, developmental and export programs for entrepreneurs has the Croatian Bank for Reconstruction and Development (below: CBRD) which is 100% owned by Republic of Croatia. In view of the global and consecuently microeconomic trends in the Croatian economy, depending on the needs and positive investment atmosphere, there are programs of greatly influence on entreprenuer's positive decision for a possible initial investment, expansion and enhancement of the business. Since its establishment until today, CBRD is continuously working on adapting to the entrepreneurs which is manifested in continious number of programs year after year. In this essay I will try to explain the function of CBRD in credit financing of Croatian economy over the years, from its establishment until today, methods of raising funds, source of the same in foreign capital market and modus operandi of this specific bank for reconstruction and developement