Credit Write-offs in Europe Accelerating

Research released Monday by ARM Intrum Justitia shows that a majority of businesses in Europe are experiencing liquidity issues due to late payments from customers, causing an increase in bad debt charge-offs.

In Intrum’s European Payment Index 2012 (EPI 2012), 57 percent of businesses in Europe claim that delinquencies are leading to liquidity problems over the past 12 months, a 10 percent increase from the same time a year ago.

Over the past 12 months, businesses in Europe have written off some $443.8 billion in debt, a record-high for the annual survey.

The EPI 2012 survey of more than 7,800 European businesses in 28 countries shows that the European economy is mixed. Germany and Nordic countries show considerable strength, whereas other countries, primarily in South and East Europe, are facing great problems.

“The fragmented picture that appeared in last year’s EPI has even been reinforced this year,” said Intrum Justitia CEO, Lars Wollung. “Alarmingly high shares of businesses in countries such as Greece, Portugal and Spain have problems with liquidity due to late payments. Written-off debts also continue to rise in several countries. In Greece, Bulgaria and Romania, more than one out of every €20 in sales is written off as bad debt. Larger economies such as the UK and Poland are also displaying surging debt write-offs.”

Watch Intrum explain the results of the survey in the brief video below: