Roughly one in five companies in Greece will be led to bankruptcy or a complete inability to meet obligations in 2017, according to results announced this week by the Athens-based market research firm ICAP.
By G. Sakkas
Roughly one in five companies in Greece will be led to bankruptcy or a complete inability to meet obligations in 2017, according to results announced this week by the Athens-based market research firm ICAP.
Based on the results of a study undertaken in the second half of 2015 on businesses’ creditworthiness, an insignificant 0.29 percent of Greece-based companies were judged as being of very low risk; 9.6 percent showed a limited risk potential. Similar figures for 2009, before the economic crisis erupted, were 10 percent as a low risk and 52.34 percent as a moderate risk.
Conversely, 52.34 percent of businesses were judged as being a moderate risk in 2009.
In 2015, 27.3 percent of businesses were judged to be high risk and 62.8 percent fielding a very high risk potential – 31.56 and 6.17 percent in 2009, respectively.
Another significant conclusion in the ICAP study deals with the continuing trend by Greece-based businesses to roll back their terms and conditions for purchases on credit. This trend was evident in 2015, with many businesses insisting on upfront-only transactions.
As of 2016, ICAP reported that cash transactions were 21 percent of the total, the second preferred method of payment. Nevertheless, the market researcher said trend prolongs uncertainty in the market.
Moreover, 69 percent of businesses in Greece are paying off obligations on a delayed basis, beyond credit deadlines, and with the average time of delay around 40 days. Of those businesses, 52 percent average delays in payment up to 60 days.
The results were announced at the 9th Credit Risk Management conference in Athens, where “N” served as the communications sponsor.