Payment Delays: Companies Pay Faster, but Credit Risk Remains Unchanged
Payment Terms Improve, But Small Enterprises Continue to Bear the Burden
Payment deadlines have significantly improved in 2024, according to the Payment Terms Observatory. However, this positive trend may be somewhat misleading: small and medium-sized enterprises (SMEs) continue to finance the cash flow of others, and the bank default rate for businesses remains stuck at 11.2%.
The progress is real, yet it remains uneven. In its latest report, the Payment Terms Observatory confirms that companies are paying their invoices more quickly. The average client payment term has dropped to 98 days of turnover, down 27 days in a year, while the supplier payment term has shortened to 70 days of purchases, compared to 85 days previously. Of the approximately 92,000 companies analyzed, 65% now settle their bills in less than 60 days.
Banks, on the other hand, monitor a far less reassuring indicator. According to the financial stability report, overdue debts from non-financial companies reached 74 billion dirhams in 2025, out of a total debt of 657 billion dirhams, leading to a default rate of 11.2%.
These two figures do not contradict each other. One measures the time taken to settle an invoice, while the other assesses the ability to repay a loan. A company can collect payments more quickly while still remaining over-indebted. Additionally, defaults may reflect past difficulties, unrelated to current payment terms.
Small Enterprises: The Vulnerable Link in the Chain
Things take a turn for the worse when looking beyond the averages. The commercial balance—the gap between customer debts and supplier obligations—is nearly nil for large companies (with an average of 1 day of turnover). This gap increases to 12 days for SMEs and a staggering 47 days for small enterprises. Despite reducing their customer payment delays by about 30 days, small enterprises still face the longest terms, at 100 days, while larger groups have seen their terms extend by about 19 days.
There are also distinct differences among sectors. Services (140 days) and manufacturing (142 days) have seen their payment terms worsen, while the real estate sector has extended its supplier payment term to 143 days. The pressure does not vanish; it simply shifts along the supply chain. Those who are slow to receive payments are often slow to make their own. This may explain how a 27-day reduction can coexist with a default rate of 11.2%, though the data needed to confirm this relationship is lacking.
The financial stability report provides another noteworthy insight. In the studied sample, the share of medium- and long-term financial debt in permanent capital decreased from 46% to 43% in 2024, while short-term debt now accounts for nearly 11% of turnover. This decline may indicate a strengthening of equity as well as a shortening of funding durations.
Liquidity vs. Solvency
Reducing payment terms alleviates the need for working capital, thereby improving liquidity. In contrast, defaults pertain to solvency: profit margins, equity, and the burden of debt. Faster invoice collections do not necessarily lead to the replenishment of cash reserves. With a default rate of 11.2%, the increase in cash flow has not yet transformed, for some companies, into an enhanced ability to repay debts.
Written by: Le Décrypteur
