Atradius: UAE Firms Fear Spike in Payment Defaults as Pandemic Chokes Business



Atradius’ Payment Practices Barometer highlights the importance of risk management to Asian businesses

HONG KONG, CHINA - Media OutReach - 10 June 2020 - Corporations in the United Arab Emirates expect increased delays in payments from customers, a growing risk of default and an overall weakening in business performance as the country copes with the disruptive impact of COVID-19, according to Atradius' latest Payment Practices Barometer survey.


With an economy struggling from the collapse in oil prices and major sectors, such as trade and tourism, hit by the pandemic, 53% of respondents in the UAE said they were concerned about a deterioration in the payment practices of B2B customers and a spike in long overdue invoices in the coming months. Nearly 30% reported they needed to delay payments to their own suppliers.

 

"Like all economies around the world, the UAE is dealing with an unprecedented disruption of business activity," noted Schuyler D'Souza, Managing Director Middle East, Atradius. "This is especially true of the trade exchanges in which the UAE plays a central role at a global level."

 

These findings are particularly notable as the UAE already offers the longest average payment terms -- 57 days -- compared to the 43-day average in Asia, leading to a sizeable proportion of working capital becoming tied up in receivables. Further, the proportion of credit-based B2B transactions in the UAE at 64% is significantly higher than the 56% average in Asia, pointing to the pivotal role that trade credit plays in the country.

 

Other key findings include:

*72% of the total value of B2B invoices issued by UAE respondents is overdue; the average in Asia is 52%

*Nearly 60% expect their industry's indebtedness to trigger a greater dependence on bank finance

*49% are worried about a decline in business performance; the remainder felt they did not have a clear view of the future

 

In this uncertain environment, enhanced credit management practices, such as regular pre-credit checks, monitoring buyer's risks and outsourcing invoice collection to a professional agency, can help businesses protect cash flows and enhance investment capacity, which is crucial for growth.


"To face the growing challenges highlighted in the survey findings, it is essential for UAE businesses to protect their company liquidity from unrecoverable trade receivables. This involves reducing customer credit risk exposure to levels that are manageable for the company and which can, in turn, free up capital that can be used to weather these challenging economic times," Mr. D'Souza said.


Get the 2020 UAE Payment Practices Barometer here: https://atradius.com.hk/en/publications/payment-practices-barometer-uae-2020-clouds-over-the-economic-outlook.html




發行人全權負責本公告的內容
About Atradius
About Atradius

Atradius is a global provider of credit insurance, surety and collection services, with a strategic presence in over 50 countries. The credit insurance, bond and collection products offered by Atradius protect companies around the world against the default risks associated with selling goods and services on credit. Atradius is a member of Grupo Catalana Occidente (GCO.MC), one of the largest insurers in Spain and one of the largest credit insurers in the world. You can find more information online at


Connect with Atradius on Social Media

 

Twitter

LinkedIn

asia

YouTube

來源:

Atradius

類別:

Business

 
發佈於

10 Jun 2020

過去的新聞稿

更多
#Insurance #Advertising, Marketing & Public Relations

25 October 2023

B2B credit risk in the UAE rises as businesses face cash flow constraints

#Insurance #Advertising, Marketing & Public Relations

25 October 2023

Asian businesses bolster credit risk management amid optimism for future growth, Atradius survey reveals

聯繫 Media OutReach Newswire

立即聯繫我們