SMEs: Precautions in Credit Sales
The crisis has rapidly increased the levels of delinquencies, and getting paid on time and in form may be vital for an SME.
Monday, April 20, 2009
Maintaining liquidity has become a golden rule for businesses and one way to keep cash on hand is to simply stop paying suppliers. Of course, those who suffer most are companies that do not have bargaining power due to their size to recover unpaid debts and to devote resources to an adequate analysis of the risks of extending credit to each buyer.
In the month of June of 2008, past due accounts and defaults represented 2.4% of the credit accounts receivable; in September, 2.7%; and in December, 3.4%.
A passive base rate in excess of 12% would be problematic, affecting the behavior of borrowers and is likely to cause an increase in defaults.
There have now been seven consecutive months during which the default rate of borrowers from the Banco Nacional de Costa Rica has increased, having exceeded the normal limit of 3% over the past three months.
The delinquent mortgage portfolio reached $1.032 billion on January 31, 35% of all delinquencies in the system.
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