Atradius: Asia Braces For Insolvency Storm Amid COVID-19 Fallout
Atradius Payment Practices Barometer highlights importance of risk management to Asian businesses
HONG KONG, CHINA – Media OutReach – 10 June 2020 – As global recession looms, Asian businesses tighten their credit management processes in a bid to minimise bad debt risks.
COVID-19 containment measures around the world have impacted both national and international supply chains and trade. Responses to the 2020 Atradius Payment Practices Barometer (PPB) survey in Asia suggest the resulting delays in payments are largely being financed by suppliers as the use of trade credit in most markets surveyed, and along with it, payment delays, have climbed. Compared to last year’s survey, in four of the markets surveyed, credit-based sales grew by an average of 14% while at the same time the percentage of overdue invoices increased by an average of 56%. In India and Singapore where credit sales fell, overdue invoices still surged by 69% and 29% respectively. India’s decline in credit use might even be the result of its dramatic rise in overdues.