Coface: level of circular indebtedness seem to have increased
According to a new statement by Coface Hungary, the level of circular indebtedness seem to have increased last year although the financial crisis has made companies less daring.
Payment deadlines were extended, delays in claim settlements have become longer and more claimants go legal over outstanding receivables. Commerce, building industry and agriculture are the worst affected. Although parties involved want to shorten payment deadlines, many with great purchase and lobby power are interested in extending them to have interest-free credits, mentioned Gábor Kárpáti, managing director of Coface Hungary law firm. Multinational chains calculate their cash-flow with 120 day payment deadline causing further delays in the supplier chain. Often suppliers at the end of the chain receive payment with 180 days delay. In industry, deadlines are shorter and payments of deposits are frequent. Agribusinesses are more debt-stricken, but most manage to stay afloat thanks to state and EU funds, said András Bagyura, head of commerce.
Related news
Related news
EM: Further Development of the Deposit Return System Continues
Thanks to the Deposit Return System (DRS) introduced at the…
Read more >Slowdown and price increase at the same time – this is how the milk market will develop in the summer
The dairy sector is experiencing both international price increases and…
Read more >Another problem could cause food prices to rise
Latin American agriculture could face serious consequences if the United…
Read more >