The latest edition of the Coface’s survey on payment behavior in Latin America highlights a strong dual trend. On the one hand, there has been a tightening of credit conditions and, on the other, a significant increase in the length of late payments. At a time of global economic challenges, and with growth in the region set to remain weak in 2025, these results raise concerns about the financial stability of Latin American businesses.
More restrictive credit conditions and a general tightening of payment terms
Companies in Latin America have responded to a difficult economic environment by tightening their credit terms. In 2024, 88% of the companies surveyed offered payment terms, a figure slightly up on 2023. However, the average term of credit granted fell from 60 days in 2023 to 53 days in 2024, a trend observed in all the countries surveyed.
Mexico stands out with the shortest credit terms (46 days on average), while Brazil imposes the longest terms, with an average of 60 days. The timber sector imposes the shortest credit terms (36 days), while the chemicals, pharmaceuticals and construction sectors offer more generous terms, often exceeding 90 days.
More frequent and longer payment delays
Late payment continues to be a major challenge for South American businesses. In 2024, 51% of companies surveyed said they had experienced late payment. In Brazil and Colombia, more than half of companies reported delays, a situation also observed in several key sectors such as construction, energy and information technology (ICT).
The average duration of late payments has also risen considerably, from 36 days in 2023 to 52 days in 2024. This rise is particularly marked in Ecuador, Colombia and Peru, where delays have increased by more than 20 days in one year. Ecuador, with an average of 64 days, has the longest delays, while Brazil (33 days) and Argentina (45 days) have the shortest.
This widespread increase in delays reflects the growing difficulties faced by companies in maintaining sufficient liquidity in the face of sluggish demand and rising costs. The phenomenon of very long delays - in excess of 150 days - although rare, has also increased, now affecting 6% of the companies surveyed, compared with less than 1% in 2023. The pharmaceutical and textile sectors are the most affected by these long delays, with increases of 60 and 38 days respectively.
Solvency problems among their customers (for 70% of companies) and weak demand (29%) are the main reasons given for these delays.
Businesses remain optimistic about their own performance in an uncertain economic environment
Despite a difficult environment marked by still-tight credit conditions and longer payment delays, more than half of the companies surveyed (54%) expect their business to improve in 2024 compared with 2023. However, when asked about the major risks for the next 12 months, companies are cautious: 46% of respondents fear a downturn in economic activity, while 43% mention increased competition and 29% point to the impact of global geopolitical tensions.
Despite these concerns, most companies (over 50%) expect payment terms and delays of payment to remain stable.
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