Posts Tagged ‘Rec’

We have been sent a copy of the NZ Credit & Finance Institutes magazine, pulse, in which Veda Advantages’ Country Manager & Company Managing Director, John Roberts provides a commentary on how SME’s should run their business when it comes to risk assessment.

It appears to be a repeat commentary from an earlier press release in the NZ Herald.

The country’s small and medium size enterprises are urged to get risk-savvy as they face their toughest year yet. Figures held by Veda Advantage, the country’s largest credit bureau, show that less than five percent of the nation’s 450,000 SMEs actually conduct proper risk assessment which includes an assessment of creditors’ ability to pay.

Right now we are all seeing the price of that serious weakness amongst the businesses that are the backbone of the New Zealand economy. Veda Advantage data shows a 29.72 percent increase in the number of defaults in July 2010 compared with the same month last year.

Company Managing Director John Roberts says the number of commercial defaults has been increasing for sometime but this means the actual numbers of companies defaulting are now quite significant.

The table below shows the increase in commercial defaults in the month of July alone for the last four years.

COMMERCIAL DEFAULTS NATIONWIDE

                                   July 2007               July 2008               July 2009           July 2010

Percentage increase               21.32%                68.14%                  24.96%               29.72%

Mr Roberts says that without sound risk assessment in place small and medium size businesses put themselves in an increasingly vulnerable position. “It only takes one big creditor to fall behind in payments or not pay and a business can be in serious trouble,” he says. On top of this without in-built risk assessment procedures a company will find it increasingly difficult to obtain credit from mainstream lenders.

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