Coface Chile SA CEO Louis Des Cars said an increasing number of Chilean companies are seeking credit insurance to shield their business from record high late-payment rates, Diario Financiero reported.
Late payments reached a record-high 98.8% in June this year, 20.9 percentage points higher than last year, according to a Coface study. In this context, credit insurance has become more relevant, the executive said. The sectors of food, chemicals, plastics, fruits, construction, steel and paper were reportedly the hardest hit.
"Companies want to be able to stay in time and we know that 25% of bankruptcies are related to a non-payment in medium-sized companies. This is why companies are looking for better risk management," Des Cars said.
According to the Coface study, Chile's economy is one of the most dependent in Latin America on exports to China. The country is therefore particularly exposed to global trade tensions and a general slowdown in the world economy. As companies have looked for ways to protect the books from deteriorating, Chile's domestic credit insurance demand has risen by 7% this year, according to Diario Financiero.
