United Arab Emirates: credit management strengthening

Payment Practices Barometer

  • United Arab Emirates
  • Agriculture,
  • Chemicals/Pharma,
  • Consumer Durables,
  • Electronics/ICT,
  • Food,
  • Metals,
  • Steel

28th June 2022

A wide range of protective measures to mitigate against the impact of customer payment default were used by businesses polled in the United Arab Emirates.


The 2022 edition of the Atradius Payment Practices Barometer survey findings for the United Arab Emirates is a valuable opportunity to hear directly from companies about how their business operations are coping with the disruptive impact of the current challenging economic and trading circumstances.

Topics covered include: payment terms set for business-to-business (B2B) customers, the average time it takes to turn overdue B2B invoices into cash, the impact of late or non-payment on the business, and expected challenges to profitability during the coming months.

The survey questionnaire was completed by businesses in the United Arab Emirates  during Q2 2022. Responses given by companies polled are contained in the report for the United Arab Emirates, which is part of the June 2022 edition of Atradius Payment Practices Barometer for Asia available on this website by clicking here.

Key takeaways from the report for the United Arab Emirates

Flexible approach to payment terms as bad debt stabilises

  • Trading on credit remains a significant factor among companies polled in the United Arab Emirates, with half of B2B sales made on credit. Our survey found that businesses in the UAE market had a flexible approach to setting payment terms, adjusting to the needs of the customer. The main criteria for setting payment terms are the customary practices of a business, but more UAE companies said they were setting terms according to the credit quality of customers.
  • 53% of invoices were reported as overdue, down from last year’s 60%, reflecting a slightly improved business condition. Another positive finding was that bad debts written off as uncollectable stabilized in the past year, although there were some signs of financial distress in the steel/metals industry. Companies in the United Arab Emirates market told us that liquidity issues were the biggest reason when customer payment default occurred. Administrative problems and disputes with customers were also cited as factors in payment default.

Optimism for future as companies strengthen strategic credit management

  • Deterioration in DSO was reported by businesses across the United Arab Emirates, largely due to a more liberal credit policy. In response, there was a rising use of external collection agencies to mitigate against the impact of worsening DSO. Our survey also found a growing awareness among UAE companies of the need for a strong strategic credit management as an important protective measure of the business profitability and viability. About 15% more businesses polled in the UAE market than in our last survey told us so.
  • Our survey found a generally optimistic mood across all the industries in the United Arab Emirates. They expect an increase in trading on credit and said they anticipate improvement in payment practices in the coming year. There was also widespread expectation that DSO would be kept under control. The main concerns reported by UAE companies were to safeguard cash flow levels and the ability to keep pace with rising demand for products and services.

Key survey findings for the United Arab Emirates

  • Half of B2B sales made on credit, chiefly to grow business
  • Increased awareness of credit insurance role in setting payment terms
  • Customer payment default trends downward, while bad debts stabilise
  • Liquidity issues trigger B2B customer payment defaults
  • Strategic credit risk management is an urgent priority
  • Businesses look ahead with optimism, focus on sales expansion
  • Main concern to cope with rising demand as economy rebounds

Interested in finding out more?

Please download the complete report for a complete overview of the payment practices in the United Arab Emirates and in the following local industries:

  • Agri-Food
  • Chemicals/Pharma
  • Consumer durables
  • Electronics/ICT
  • Steel/Metals


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