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Singapore companies getting faster in paying off debts

Latest data for Q2 shows companies took an average of 36 days to pay off their debts from the time they were due, seven days fewer than in the first quarter of this year.

SINGAPORE: Singapore companies are getting faster when it comes to settling their debts. Data released by DP SME Commercial Credit Bureau on Tuesday (July 15) showed that in the second quarter of this year, they took an average of 36 days to pay off their creditors once the debt was due, seven days fewer than in the previous three months.

There was also a sharp drop in the percentage of severely delinquent debts, or debts that were still unpaid 90 days or more after they were due. Compared to the previous quarter, this halved from 29 to 14 percent.

The findings are based on payments by more than 120,000 corporations and SMEs.

In terms of sectors, the credit-related industry saw the biggest improvement in speed at settling debts, from an average of 78 days in Q1 to 52 in the second quarter.

Ms Ong Siew Kim, Senior General Manager of DP Information Group (DP Info) says, the improved showing follows a blowout in payment times during the first quarter of the year. "The blowout was caused by people increasing their expenditure on credit during the festive period (Q1) which leads to a higher rate of default and slower payments in the early part of the year, followed by a correction in the second quarter."

She also noted that businesses have become more serious about the companies they extend credit to and the terms they offer. They are now doing more credit checks before approving any credit.    

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