Asian Firms Divided on Insolvency Outlook Amid Ongoing Trade Challenges
The survey, conducted in the second half of Q2 2025 across China, Hong Kong, India, Indonesia, Japan, Singapore, Taiwan, and Vietnam, highlights regional resilience amid rising financial vulnerabilities driven by global trade policy uncertainty, liquidity constraints, and worsening B2B payment behavior.
Late payments affect 44% of B2B credit sales, with bad debts averaging 5%—a seemingly modest figure that nonetheless significantly impacts profitability. Businesses cite customer liquidity issues, delays in customers' payment processes, invoice disputes and supply chain disruptions as the top reasons for late payments.
The survey also found that three in five Asian companies (60%) have expanded trade credit offerings but kept payment terms steady to limit exposure to payment risks while maintaining customer loyalty and encouraging sales. Furthermore, the survey shows, 54% of all B2B sales are transacted on credit with 48-day average payment terms, highlighting the central role credit plays in financing trade across Asia. Bank loans, invoice financing and internal funds have served as the other key sources of funding over the past 12 months.
Looking ahead, the survey's findings depict a region also divided on considerations such as inventory turnover and days sales outstanding (DSO) - the time taken to collect payments - but united in acknowledging and anticipating macro challenges, such as the influence of increased trade uncertainties, growing regulatory compliance burdens and the pressures to adopt sustainable practices to address environmental concerns.
At the same time, projections of sales and profitability across Asia remain cautiously optimistic as indicated by companies' plans to manage payment risk. In this scenario, balancing the dual needs of liquidity and risk management will be pivotal for success in the months ahead, the survey concludes.
'The latest findings from our Payment Practices Barometer for Asia reveal critical insights into the operational challenges faced by businesses. Issues like increasing bad debts, trade policy uncertainties, compliance pressures, and sustainability initiatives are prominent. However, there is also cautious optimism as companies acknowledge these challenges and explore solutions,' stated Eric den Boogert, Managing Director of Atradius in Asia. 'This includes adapting to market changes and ensuring optimal liquidity while effectively managing risk through strategies like outsourcing credit risk management to enhance traditional internal measures.'
The 2025 Atradius Payment Practices Barometer for Asia report can be found here.
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