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Businesses in Bulgaria are among the most concerned in Europe of late payments

NPLs in the EU are diminishing

Bulgarian businesses are among the most concerned of late payments in Europe and say it will lead to a serious loss of income, according to the European Payment Report 2020. The conclusions are based on a survey conducted in the first half of 2020 and covered nearly 10 000 companies in 29 European countries, including Bulgaria.
Almost half of Bulgarian companies (49%) say that late payments will impact loss of income. It is the joint highest figure in European countries in the survey. Businesses in Bosnia and Herzegovina, Switzerland and Serbia also have similar concerns. The European average among SMEs is 32%.
Debtors in financial difficulties are going to be one of their top three payment challenges over the next year that will be marked by the coronavirus crisis. The most concerned are businesses in Southern Europe as 53% of all respondents share such an opinion. The European average is 38%.

Nearly six in 10 businesses in Southern Europe (57%) expect the risk of late payments to increase over the next 12 months.

43% of all European respondents predict that risk from companies’ debtors in terms of late or non-payment will increase over the next 12 months, while 19% say that it will increase significantly. The European Payment Report 2020 marks a dramatic shift in attitude from last year’s survey: in 2019, just 16% expected risks from debtors to increase. The dramatic shift is due to the unprecedented COVID-19 crisis.

At the same time businesses in Bulgaria are more optimistic in the context of the unprecedented COVID-19 crisis and widespread negative expectations in most European countries. According to the published earlier Special edition of the European Payment Report 2020 only one third of Bulgarian businesses (33%) believe that the recession is inevitable in the country. More than half (56%) of the European survey respondents share the same concerns about their local economies. Only Croatian businesses (27%) are more optimistic than Bulgarian companies. Businesses in Italy (83%) are the most pessimistic about their economy, as the country was one of the most affected in Europe by the COVID-19 epidemic during the spring.

In a period of crisis, a significant part of European businesses increasingly rely on incoming international payments and the share of foreign flows grows seriously, according to the European Report on Payments 2020. Bulgaria ranks in 5th place in the survey as 33% of incoming payments come from a customer in another country. For comparison, in 2019 Bulgaria ranked third among the European countries as businesses said that 17.2% of their revenue came from foreign sources.
A year later, Bulgaria ranks fifth, although the percentage of incoming international payments has almost doubled. In the survey 2020 before Bulgaria are Bosna and Herzegovina (36%), Ireland (36%), Croatia (35%) and Slovenia (34%). Businesses across Europe report that, on average, about a quarter (25%) of their incoming payments are international in nature. The lowest level of incoming international payments in 2020 come to Slovakia (14%) and Belgium (15%). In 2019 the average European level of incoming payments from a customer in another country was just 10.7% 👇.