Still too many business failures

Retail, real estate, and construction: these were the top three sectors in which companies experienced the most difficulties at the end of September. These difficulties ended up bringing many entities to their knees. At the end of September, 9,380 business failures were recorded by Inforisk.

This represents an increase of 13% compared to the same period last year, and in the third quarter of this year, 2,709 cases were recorded, up 1%. “It is mainly during the last quarter of the year that insolvencies accelerate. The year could end with 14,400 insolvencies”, says Amine Diouri, Director of Research and Communications at Inforisk.

Very small businesses remain at risk: 98.6% of insolvencies concern them, compared with 1.3% for SMEs and 0.1% for large companies. “Moroccan companies are currently experiencing many difficulties, including great pressure on their cash flow, but they are not giving up. We need to give them the means to overcome these difficulties and grow. This is what we expect from the next Finance Law, to be favorable to business growth and job creation” «, said Chakib Alj, President of the Employers’ Association (CGEM), at a press conference on the Employers’ recommendations for the next Finance Law.

Beyond the economic situation, very small businesses are penalized above all by long payment terms. The new law, which came into force last July, could “correct “the dysfunctions experienced by “inter-company credit”, especially as it requires companies to make quarterly statements in order to provide information on the state of their payment terms vis-à-vis their suppliers. The new law applies initially to companies with sales of over 50 million dirhams (USD 5 million) excluding tax. The scale of fines for late payment is set at 3% for the first month of delay and 0.85% for each additional month or fraction of a month. From January 1, 2024 onwards, the obligation to make a statement will be extended to companies with pre-tax sales of between 10 and 50 million Dirhams (USD 1 to 5 million). In 2025, this obligation will be extended to companies with annual sales of at least 2 million Dirhams (USD 200,000) excluding tax.

Khadija MASMOUDI