Allianz Trade has just published its 3th recovery complexity index which measures how difficult it is to recover an outstanding payment for a company in a given country.
This index is a decision-making tool for exporters, particularly in terms of the markets to target, in a context of a strong recovery in business failures on a global scale (10% in 2022 and 14% in 2023) . It covers 49 countries which represent 90% of world GDP and 85% of international trade flows.
Concretely, this index is synthesized by a score ranging from 0 (least complex overlap) to 100 (most complex overlap). This score combines the judgment of Allianz Trade’s collection experts on more than 40 indicators concerning local payment practices, local legal proceedings in force and local insolvency proceedings in force.
Still, the recovery complexity scale developed by the operator is divided into four levels, namely notable complexity (score between 40 and 50), high (50 and 60), very high (50 and 60), severe (greater than 60). Still according to Allianz Trade, recovering an unpaid bill is (still) easier in Europe.
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In which country is debt collection the least complex? Unsurprisingly, and as in the previous edition of the collection complexity index (2018), Europe is at the top of the ranking. Indeed, the top 10 of countries where collection is the least complex is made up of Sweden (with a score of 30), Germany (30) and Finland (32) which are the best students, with stable scores compared to the previous edition. New Zealand (12th, with a score of 36, +1 point vs 2018) is the first non-European country, followed by Brazil (20th, 43, stable).
At the other end of the ranking, Saudi Arabia (91, -3 points), Malaysia (78, stable) and the United Arab Emirates (72, -9 points) are the countries where recovery is the most complex. Despite some notable improvements in terms of legal procedures, the recovery of unpaid debts is 3 times more complex in Saudi Arabia than in Sweden, Germany and Finland.
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What about Morocco? The Kingdom ranks 39th in the debt collection complexity index, after Togo and ahead of India, with a score of 57, a slight drop compared to the previous edition. This score represents a very high level of complexity.
Indeed, the average collection time in Morocco remains high according to this study and the payment behavior of domestic companies is deteriorating with payments being made between 120 and 150 days on average.
It should be noted that the exposure of Moroccan exporters to the complexity of international collection is high, with a score similar to that of the Netherlands or China: among Morocco’s 10 main trading partners, 5 countries have an index of remarkable collection complexity and two countries obtain a very high index, including the United States and India.