Dubai Chamber calls for quicker payments
The global financial crash of 2008 is still fresh for many people around the world, and has led to a change in the business sphere: slower payments. But this exact consequence is what withholds the economy from moving forward faster.
At the opening keynote of Dubai Dialogue 2019, H.E. Hamad Buamim, President and Chief Executive Officer of the Dubai Chamber of Commerce, explained that many businesses wait till the last minute to make payments, or delay them, which has a domino effect. Delayed payments lead to businesses at the receiving end having to delay payments to their suppliers, take on loans and pile up debt, which can have negative consequences on a larger scale.
Buamim emphasised upon paymasters needing to quicken payments instead of just keeping it in banks, as that's not going to make any practical difference with interest rates being as low as they are today. He further said that the Chamber encourages quicker payments and are recommending it to government entities as well as private firms.
“The slower payments impact the smaller businesses more, as the big players usually have good lines with the banks so they can [get the money they need quickly]. We want the big ones to take this responsibility [of quicker payments], so the small ones do not suffer.”H.E. Hamad Buamim, President and CEO of the Dubai Chamber of Commerce
Talking about the root of the problem, Buamim said “for some businesses, the slower payments are a way of being cautious. But the problem with everybody becoming cautious and slowing down payments, [is that it] impacts everyone.”
The UAE government has recently reduced the payment timeline for SMEs from 90 days to 30 days. As bigger entities have the buying power, they must pay sooner to circulate the money into the economy, rather than stagnating it.
The sooner businesses make payments, the sooner the receiving parties can clear dues, invest in projects, and grow, giving a boost to the economy. This is a call to every business owner to play their role in supporting the economy for a better future.