UAE businesses face liquidity strain from payment delays

The latest Atradius Payment Practices Barometer indicates that persistent payment delays and rising default concerns are straining liquidity and cash flow management for businesses in the UAE. While trade credit is increasingly used to drive growth and maintain competitiveness—with credit sales now averaging 47% of B2B transactions—it has also heightened payment risks.

Approximately 40% of B2B invoices are paid late, with the industrial and construction sectors experiencing the most significant impact due to complex payment cycles. The primary driver of these delays is customer cash flow constraints, affecting 49% of respondents, followed by banking processes and internal approval delays.

As a result of these trends, 47% of companies report higher financing needs and 46% face reduced liquidity headroom. Looking forward, 46% of businesses expect customer default risks to rise further. To mitigate these pressures, many companies are implementing stricter credit controls, more rigorous customer assessments, and increased use of credit insurance.