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Debt collection in Asia-Pacific nations among world's toughest: report
WHEN it comes to debt collection, countries in the Asia-Pacific region stand out for having one of the most complex process in the world. The region has the highest number of countries ranking in the "severe" category for debt collection complexity.
Singapore escaped the "severe" category, coming in around the middle at 27th on the list of 50 countries in the "high" category.
In the region, Malaysia came in third after top-ranked Saudi Arabia and the United Arab Emirates, but ahead of China and seventh-placed Indonesia.
The data was revealed by credit insurance company Euler Hermes in a report, which measured the level of complexity relating to international debt collection procedures within each of the 50 countries surveyed.
Euler Hermes's report assessed local payment practices, local court proceedings and local insolvency proceedings.
The report showed Western European countries taking the lead in reducing debt collection complexity - with Sweden, Germany and Ireland being the easiest to collect debt in.
Companies in the Republic have generally good DSO (days sales outstanding) and payment behaviour, the report showed, with invoices usually paid within 30 to 60 days depending on the industry.
The court system in Singapore is fairly efficient, Euler Hermes said, even though legal action could be expensive, with overall legal proceedings potentially reaching between S$5,000 and S$20,000 on average for a simple case, but ballooning to as much as S$40,000 for complex ones.
However, the report also highlighted Singapore law provides no guidelines as to how late payments should be handled, while contracts are the only reference when business relationships sour.
"The insolvency framework is in line with international standards. However, in practice, as in most countries, collecting debt from insolvent debtors would prove to be a genuine challenge."