Survey finds your late-paying Hungarian customers are just stringing you along

According to a survey made by the Hungarian unit of French credit insurance company Coface summarized on index.hu, only 50% of local companies currently holding back on paying their creditors are actually unable to pay because of financial distress. The study of 50,000 companies found that 20% of “nonpaying” have the means to pay their invoices but choose not to, while a further 30% of bad debts have gone bad because of clerical errors. At the time of the survey 4% of the firms where judged to be “totally unqualified” for any sort of credit and an additional 3% were already under bankruptcy proceedings.

Coface, which mostly covers Central Europe, has developed a 10 point scale for rating the risk factor for payment risk. Currently, the ratio of average-to-high risk companies in the region is 50%, just above the overall figure for Hungary. As an effect of the ongoing crisis, loans are more expensive and harder to get, and the deadlines for repayment are being lengthened, even though doing so usually results in a greater chance that the money will never be paid back.