📈 SME Competitiveness and Delayed Payments

• Core Issue: Small and Medium Enterprises (SMEs) face severe financing pressures due to delayed invoice settlements by larger corporate customers, effectively forcing SMEs to act as lenders despite facing higher borrowing costs. • Capital Circulation: While policy debates focus on bank lending rates, credit supply, and collateral, insufficient attention is given to the trade credit SMEs extend. Prolonged payment terms (stretching from agreed 30 days to 60–90 days) increase working-capital reliance and burden supply chains. • Market Barriers: Extended payment cycles create undeclared capital barriers for smaller firms trying to compete for large customers, impacting national entrepreneurship, margins, and expansion capacity. • Corporate Governance: Delaying payables artificially inflates working-capital metrics for financially stronger companies by drawing on weaker suppliers' balance sheets, reversing efficient capital allocation principles. • Key Recommendation: Policy focus must expand from simply increasing bank credit supply to measuring and improving trade credit circulation. Sectors, including listed companies, require greater transparency around average payment periods and supplier receivables.