Euler Hermes’ “2018 Collection Complexity Score and Rating” aims at measuring the level of complexity relating to international debt collection procedures within each of the 50 countries taken into consideration. Three main factors were analyzed: local payment practices, local court proceedings and local insolvency proceedings. It therefore provides a simple assessment of debt collection proceedings in each country, helping to support decisions and manage expectations when trading internationally.
Western European countries lead the pack
While the global average stands at 51 on a 0-100 scale, showing a very high level of collection complexity around the world, Western Europe stands out when it comes to simplifying the life of companies trying to recover their dues.
Sweden, Germany and Ireland take the lead, ranking as the least complex countries with respective scores of 30, 30 and 31. Sweden and Germany really set the example, being the only country with the lowest score of complexity in local payment practices, local court proceedings as well as in local insolvency proceedings.
The region also presents the highest number and share of countries at a “notable” collection complexity. 14 out of 16 countries stand at the less severe level, the exceptions being Greece and Italy, (both rated as high level of collection complexity).
Middle East at the tail end
Middle East stands at the opposite end of the spectrum with Saudi Arabia and the United Arab Emirates ranking as the most complex countries when it comes to debt collection. With a score of 94, international debt collection is three times more complex in Saudi Arabia than in Sweden.
Asia-Pacific is not far behind and counts the highest number of countries standing at a severe rating of collection complexity, with Malaysia (right behind the United Arab Emirates), China and Indonesia.
Pockets of collection complexity are everywhere
Euler Hermes’ report also demonstrates that the largest economies, most dynamic markets, and the less vulnerable countries do not necessarily entail more conducive a business environment. Pockets of collection complexity exist in all countries, even in Sweden. Indeed, complexity in international debt collection depends on many different factors. At a global level, it appears that the key factor of complexity are by far local insolvency proceedings, which are not always effective, i.e. taking into account priority rules and cancellation of prior transactions.
Source : Allianz Real Estate