UAE businesses are facing growing pressure from rising bad debts and uncertain payment behavior. A recent survey of business leaders shows mixed signals across the country’s B2B landscape, revealing a tough climate for managing financial risk.
Half of all B2B transactions in the UAE are conducted on credit terms. The average payment period stands at 47 days. However, 58% of these payments arrive late, due mostly to internal delays or customer financial stress. This trend is straining liquidity and forcing firms to tighten control over working capital.
To combat this, companies are strengthening credit risk strategies. Many now combine internal checks with tools like credit insurance. This shift reflects how seriously businesses view rising bad debts and the growing need for smart credit policies.
Although 43% of respondents said payment trends remain unchanged, others reported either faster or slower payment patterns. As a result, financial outcomes vary widely across industries and company sizes.
Credit risk remains a top concern for business owners in the UAE. Inventory imbalances and supplier payment delays are becoming more common. These trends signal how companies are managing cash cautiously while prioritizing financial flexibility.
Trade credit continues to serve as the most relied-upon funding source at 58%. It is followed closely by bank loans at 52% and internal capital at 49%. These figures highlight the importance of managing accounts receivable efficiently.
Different industries face unique risks. In the pharmaceutical sector, 60% of invoices go unpaid beyond terms. Additionally, over half of the companies in that space expect more insolvencies ahead. Steel and metal businesses report fewer worries about insolvency but still see over half of their invoices delayed.
The FMCG sector is being more cautious. Just above 50% of its sales occur on credit, and average payment terms are shorter. Even so, 56% of FMCG companies expect more customers to default in the future.
Credit risk continues to dominate decision-making across sectors. With liquidity tightening and bad debts increasing, more businesses now see the need to act early. Some delay their supplier payments to free up cash, while others are investing in financial tools and data analytics.
Opinions remain split. Half of UAE companies anticipate a rise in customer defaults. The rest expect no change in insolvency levels. Still, many remain optimistic about sales and profitability over the next few months.
Despite ongoing geopolitical uncertainty and regulatory shifts, businesses in the UAE continue to adapt. Their flexibility and strategic planning show that, even under stress, the private sector is moving forward.
