Recovery from the pandemic, the ongoing crisis in Ukraine and high import and rising costs are all factors resulting in a greater shift in credit requests.

The Malta Business Weekly speaks to JOSEF BUSUTTIL, Director General, Malta Association of Credit Management (MACM). MACM represents suppliers selling on credit in Malta and other creditors hailing from all sectors of the Maltese economy.

“Certainly, we can expect this to affect the business community, as banks are treading very cautiously when it comes to lending; we will see buyers looking for credit from trade suppliers and other means of borrowing. Businesses need to proceed with caution to mitigate risks. After all, we know credit costs money.”

Busuttil explained the current scenario: “At present, we already see interesting shifts in patterns. In a recent survey at MACM, we identified the Average DSO – Days Sales Outstanding, also referred to as ‘the payment collection ratio’ across all the Maltese business sectors as of 31 December 2021, was 84.60 days. MACM notes that there has been an increase of 4.92 days compared to the previous year’s DSO figure, which stood at 79.68 days. It must be noted that a DSO of 84.60 days is still relatively high when compared to the average DSO of other European countries, which reads 52 days for B2B, 31 days for B2C and 62 days for the Public sector (Intrum Justitia Late Payment Report – 2022).

Read the full story on the Malta Business Weekly here.