Payment delinquency in Singapore hits a record high of 53.8%

More than 50% of local commercial payments are made only after the agreed terms of payment.

According to a release, local payment performance has taken a turn for the worse after hitting a 12-month record low in payment delinquency last quarter. As global economic woes persist into the 2nd  quarter, more firms are running into problems with poor payment made to their suppliers.

The impact of a pull-back in  economic growth over the last quarter was clearly evident from the significant increase in payment delays across  all industries. Over 50 per cent of slow commercial payment transactions were recorded last quarter.  

According to the Singapore Commercial Credit Bureau (SCCB)’s proprietary payment data, payment delays have hit a record high of 53.8 per cent, a sharp 11.9 percentage-point increase from the previous quarter. This also  marks the second time when more than 50 per cent of local commercial payments are made only after the agreed terms of payment in the history of SCCB’s payment analysis. Slow payment has increased by 0.7  percentage points year-on-year, reversing last quarter’s downward trend when payment delays hit a 12–month low.

Meanwhile, payment efficiency fell substantially by 7.3 percentage points from the previous quarter. On a yearon-year basis, prompt payment dips by 1.7 percentage points, registering a record low of 37.3 per cent. The analysisalso further revealed that partial payments have been on a steep decline.

Lesser firms are making partial payments compared to the preceding three quarters. Partial payments have decreased by 4.6 percentage points to 8.9 per cent. This marks the second lowest percentage of partial payments being made in a single quarter since a year ago in Q2 2011 when partial payments only made up 7.9 per cent of total commercial transactions.