What percentage of B2B transactions in UAE are now credit sales?

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Credit Sales Constitute 47% of B2B Transactions in the UAE

Credit sales now represent an average of 47% of business-to-business transactions within the United Arab Emirates. This trend underscores the significant reliance on trade credit for fostering growth and maintaining customer relationships, as revealed by the latest Atradius Payment Practices Barometer.
Increased Reliance on Trade Credit

UAE businesses are increasingly utilising trade credit to remain competitive, with nearly half of surveyed companies reporting an increase in extending credit in recent months. This expansion of credit sales, now averaging 47% of B2B transactions, while beneficial for sales volume and relationship building, simultaneously elevates the associated payment risks for businesses.
Persistent Payment Delays and Deterioration

Payment performance remains a considerable challenge, with approximately two out of every five business-to-business invoices being paid late. The data indicates a more substantial number of businesses experiencing a worsening in payment behaviour rather than an improvement. The industrial and construction sectors are particularly impacted, a situation attributed to the typically longer and more intricate payment cycles inherent in these industries.
Impact on Business Liquidity and Planning

The consequence of these payment patterns is a strain on corporate finances. Customer cash flow constraints are identified as the primary driver of delays, accounting for 49% of instances. This leads to significant financial pressures, with 47% of companies reporting a need for higher financing, 46% experiencing a reduction in their liquidity headroom, and 38% facing difficulties with cash flow planning. Concerns are also escalating regarding overdue receivables potentially converting into bad debt, with nearly half of respondents anticipating a further rise in default risk.

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What percentage of B2B transactions in UAE are now credit sales?

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