Respecting payment terms

An anchor to be deployed to support moroccan smes

Abstract

This study aims to assess the impact of longer payment terms on the survival of Moroccan SMEs. The data collected and processed by Bank Al-Maghrib and the Observatory of payment delays in Morocco, converge towards the same unique observation, that Moroccan VSEs are the first victims of payment delays, with customer delays exceeding 8 months in 2021. This study highlights the challenges faced by these companies, and explores the legislative measures that could improve their situation. Using a methodological approach based on narrative synthesis and the analysis of quantitative data, the study highlights the positive impact of respecting payment deadlines on the growth and sustainability of Moroccan SMEs. According to a survey conducted by the World Bank, late payment is the cause of 35% of business failures in Morocco. A strong correlation is becoming evident between payment delays and business failures, with nearly 40% of failures caused by late payment. Since 2010, late payments have been the leading cause of business failure.