South Africa among world’s toughest markets for debt collection

SOUTH Africa ranks among the most difficult countries in the world for recovering unpaid invoices, according to the latest Collection Complexity Score and Rating released by Allianz Trade, the global leader in trade credit insurance.

The 2026 edition of the report, published in Paris on Tuesday, assesses how easy – or difficult – it is for companies to collect commercial debt in 52 economies representing about 90% of global GDP and trade.

Allianz Trade’s global Collection Complexity Score stands at 47.2 out of 100, placing the world firmly in the “High” risk category.

South Africa recorded a score of 67, signalling a “Severe” level of collection complexity. The country’s position has remained unchanged for the past four years, underscoring persistent structural challenges in the local debt recovery environment.

According to the report, payment delays are a major pressure point. While standard terms are typically 30 to 60 days, many South African companies are being paid only after up to 90 days. In some cases, particularly among small and medium-sized enterprises, settlement can stretch from 120 to 180 days.

Allianz Trade attributes the trend to financial strain on businesses and a sluggish domestic economy, both of which are tightening liquidity and lengthening payment cycles.

Exporters face rising international risks

The report also highlights growing challenges for South African exporters trying to recover payments abroad. Among South Africa’s top 20 export destinations, the most difficult markets for collecting outstanding debt are Saudi Arabia, the United Arab Emirates, and China – South Africa’s largest trading partner.

Globally, Saudi Arabia, Mexico, and the UAE are identified as the three most complex countries for international debt recovery, when factoring in local payment practices, court procedures, and insolvency frameworks.

By contrast, Germany, the Netherlands, and Portugal are rated the easiest jurisdictions in which to recover international commercial debt.

“International debt collection is almost three times more complex in Saudi Arabia than in Germany,” said Pascal Personne, Head of Group Claims and Collections at Allianz Trade. He added that although the gap between advanced and emerging economies has narrowed over time, it remains significant.

On average, the Middle East and Africa are now the two most complex regions in the world for debt collection.

Global risk eases slightly, but pressure remains

While global collection complexity has eased marginally since the 2022 edition, Allianz Trade warns that debt recovery remains a major challenge for corporates.

The share of countries rated “Severe” dropped slightly to 15% (from 16% in 2022), and those in the “Very High” category fell to 21% (from 29%). However, the proportion of countries in the “High” and “Notable” categories increased, suggesting a broader spread of moderate risk.

Despite this shift, the underlying threat has not diminished. Allianz Trade estimates that 48% of international trade receivables are now located in countries classified as “Very High” or “Severe” risk. In value terms, this represents about USD1.1 trillion – a significant increase in absolute exposure compared to 2022, driven by the growth of global trade.

“Insolvency proceedings still account for the bulk of collection complexity in all regions,” said Fabrice Desnos, member of Allianz Trade’s Board of Management. He added that local payment practices are a particularly strong driver of risk in the Middle East, while court-related difficulties remain more frequent in Africa, Latin America, and parts of the Middle East than in Western Europe.

With business insolvencies elevated worldwide and global fragmentation deepening amid shifting trade routes, geopolitical tensions, protectionism, and rising digital risks, Allianz Trade warns that international debt collection is likely to become even more complex, especially for exporters.

New trade hubs, old collection problems

The report also focuses on so-called “Next Generation Trade Hubs” – emerging centres such as the UAE, Vietnam and Malaysia that are becoming increasingly important in global supply chains.

Despite their growing strategic appeal, these markets display an average collection complexity score of 62, placing them in the “Severe” category.

“In a world divided by geopolitics, protectionism and the effects of climate change, global trade is forging new paths,” said Maxime Lemerle, Lead Analyst for Insolvency Research at Allianz Trade. “But these new hubs call for selectivity and close credit management when considering doing more business there.”