Taiwan’s B2B sector sees bad debt triple
The local chemicals industry has as high as 12% of B2B debt turning sour.
Taiwan’s business-to-business (B2B) sector saw a sharp rise in bad debts written off as uncollectable, to an average of 8% of B2B debt, according to a survey by reinsurer Atradius.
Taiwan’s chemicals industry logged the most souring debt, with an average of 12% of B2B debt going bad, Atradius found.
A majority of businesses polled in Taiwan cited liquidity issues as a growing factor leading to B2B customer payment default.
READ MORE: Taiwan bad loans climb to $2.24b in February
“Almost one third of companies told us they experienced a significant deterioration in Days-Sales-Outstanding (DSO), a threat to both cash flow and to business growth,” Atradius wrote.
As a result, companies polled in Taiwan reportedly cited the need for a credible and strong credit management strategy.
“There was focus on the internal credit process to manage payment defaults and a notable rise in businesses who either outsourced the issue to a credit insurer or who purchased specific trade finance solutions,” Atradius noted.