Payment delays continue to strain UAE businesses as trade credit expands
Trade credit remains essential for driving growth and strengthening customer relationships in the UAE. However, the latest Atradius Payment Practices Barometer reveals that persistent payment delays and rising default concerns are putting increasing pressure on liquidity and cashflow management.
UAE businesses are leaning more heavily on trade credit to stay competitive. Nearly half of respondents report extending more credit in recent months, with credit sales now making up an average of 47% of B2B transactions. While greater payment flexibility supports sales and relationships, it also heightens payment risk.
Payment performance remains challenging. Around two in five B2B invoices are paid late, and substantially more businesses report a deterioration in payment behaviour than an improvement. Industrial and construction sectors are the most affected, due to the longer and more complex payment cycles typical of these industries.
Customer cashflow constraints are the leading cause of delays (49%), followed by banking processes, internal approvals, and goods or services not being delivered as agreed. As a result, 47% of companies face higher financing needs, 46% report reduced liquidity headroom, and 38% struggle with cashflow planning. Concerns are also growing that overdue receivables will turn into bad debt.
Looking ahead, customer default risk remains a major concern. Nearly half (46%) of respondents expect default risk to rise further, while 39% anticipate it will stay elevated. This cautious outlook highlights the need for continued vigilance.
“Trade credit continues to play a vital role in supporting business growth across the UAE, but companies are having to balance expanding trade opportunities with a more challenging payment environment,” said Roeland Punt, CEO of Atradius Middle East. “Payment delays remain widespread and concerns about customer default are increasing, placing greater pressure on liquidity and cash flow planning. As a result, many businesses are strengthening their approach to credit risk management, combining closer customer monitoring with measures that help safeguard cashflow and support resilience.”
To address these pressures, companies are stepping up credit controls and increasing their use of risk mitigation tools. This includes more rigorous customer assessments, close monitoring of payment behaviour, stronger collections processes, and the use of credit insurance. Credit insurance is particularly common among larger industrial businesses.
Businesses are also mindful of broader macroeconomic risks. Slower economic growth, inflation, cost pressures, and rising interest rates are expected to continue influencing B2B payment behaviour. Despite these headwinds, profitability expectations remain resilient, with a strong majority of businesses reporting rising profit margins even amid ongoing payment risks and elevated credit pressures.
Atradius conducted the annual survey during the second half of Q2 2026. Results should be interpreted with this timing in mind, as market conditions may have evolved. Responses were gathered from businesses across the UAE across the industrial, construction, trade, and services sectors.