Narrowing financial possibilities and liquidity difficulties are likely to cause worsening payment discipline among Hungarian businesses in 2009, the Hungarian unit of French credit insurance company Coface told MTI on Thursday.
There will be an increasing number of insolvencies in Hungary and the entire central and eastern European (CEE) region in 2009, Coface Trade Manager András Bagyura said, adding that a change in mentality and strict observance of regulations are required to reverse this tendency.
Bagyura said the average payment period for a Hungarian company rose to 167 days by the end of 2008 from only 35 days in June 2003. The average payment timeline in the Baltic states was 151 days, while it was 140 days in the EU, 101 days in western Europe and 69 days in the CEE region.
Bagyura noted that multinational and state-owned companies in Hungary are just as tardy in their payments as SMEs.
Regulations aimed at reinforcing payment discipline have failed in Hungary, Bagyura said, adding that introduction of a simplified process for establishing businesses has caused owners to set up new companies to avoid payment responsibilities.
The head of Coface’s business-information division, Eva Friedrich, said that based on a survey conducted in 2008, most Hungarian companies do not posses even the basic means of risk management. Only 900 companies purchase credit ratings regularly, although this number is increasing, Ms Friedrich added. (MTI-Econews)