Italy: trade credit increasingly used to grow sales

Payment Practices Barometer

  • Italy
  • Agriculture,
  • Chemicals/Pharma,
  • Food,
  • Machines/Engineering,
  • Metals,
  • Steel

25th November 2020

The COVID-19 economic downturn has had a great impact on businesses in Italy. The country endured one of the longest and most stringent lockdowns in Europe.

Introduction

The Italian government has enacted some social assistance measures and a temporary freeze on insolvency proceedings in a bid to invigorate the economy and keep trade flowing. Businesses have also taken steps to promote trade. Following the pandemic downturn, businesses in Italy offered the greatest percentage of trade credit for five years.

The majority of Italian respondents to the Atradius Payment Practices Barometer survey that offered trade credit told us they did so mainly to domestic customers in order to stimulate credit sales. Although it might seem counterintuitive to offer credit during a recession and environment of heightened insolvency, B2B credit can be a valuable tool for business generation, particularly when cash flow is protected.

Key takeaways from the report

  • More than half of business sales of Italian suplliers use trade credit
  • Payment terms increase in length compared to pre-pandemic levels
  • After the onset of the pandemic, nearly half of respondents approached self-insurance for  the first time,
  • Businesses respond to poor cash flow by delaying payment to suppliers
  • Most businesses in Italy expect domestic economy to improve in 2021
  • Attitudes of Italian businesses towards global economy and international trade are a little more upbeat

Interested in getting to know more?

For a complete overview of the corporate payment behaviour in Italy during the COVID-19 pandemic and global recession, please download the complete report.
The report gives also insight into the impact of the pandemic-induced economic crisis on the following industries in the country:

  • Agri-food
  • Chemicals
  • Machines
  • Steel-metals
  • Textiles

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Disclaimer

The statements made herein are provided solely for general informational purposes and should not be relied upon for any purpose. Please refer to the actual policy or the relevant product or services agreement for the governing terms. Nothing herein should be construed to create any right, obligation, advice or responsibility on the part of Atradius, including any obligation to conduct due diligence of buyers or on your behalf. If Atradius does conduct due diligence on any buyer it is for its own underwriting purposes and not for the benefit of the insured or any other person. Additionally, in no event shall Atradius and its related, affiliated and subsidiary companies be liable for any direct, indirect, special, incidental, or consequential damages arising out of the use of the statements made information herein.