In 2022, Asian businesses adopted a stricter approach to credit terms due to a year of aggressive interest rate hikes, tighter financial conditions, and increased inflation.
According to the Asia Payment Survey conducted by Coface, fewer companies offered credit sales, and the average payment terms reduced from 71 days in 2021 to 66 days in 2022. Across the 13 sectors surveyed, most of them tightened their credit terms. The ICT and construction sectors, in particular, significantly reduced the duration of payment terms. This change was driven by higher input costs, labor shortages, and weaker global demand, which exerted pressure on their financial positions.
As credit terms became stricter, payment delays became longer. The average payment delay increased from 54 days in 2021 to 67 days in 2022. Among the nine economies covered in the survey, six of them experienced longer payment delays, with Malaysia reporting the most significant increase. On the other hand, payment delays were shorter in Hong Kong, Australia, and China, although Australian and Chinese businesses still reported the longest average payment delays.
Learn more here: https://www.coface.com/News-Publications/Publications/Asia-Payment-Survey-2023
