 "India versus global payment practices")
Prime Minister Narendra Modi’s flagship projects and reforms have led to a dramatic rise in global investor confidence, as corroborated by Moody’s improvement of India’s rating from stable to positive. This, in turn, has inspired many to prophesise upcoming economic showdowns between the Dragon and the Tiger, with O’Neill going on to suggest that India may be number 3 after China and the US by 2030 from its current 7th place in GDP value.
However, plans and stratagems aside, the promised ‘double-digit’ economic growth for India requires the addressal of the various problems currently plaguing the smaller to medium-sized enterprises (SMEs) – the backbone of most economies – in the nation. Among them is the fact that 79% of Indian SMEs believe that one crucial business challenge arises from the dearth of available credit instruments which, in turn, affects the management of cash flow – this challenge is late payment problems.
The legislative response against, and resolution of, late payment problems in each economic powerhouse becomes a significant indicator of future trends.
We at Hummingbill chose these two countries because the United States is considered a valuable market for Indian businesses, and China is regarded as an economic rival, as well as a valuable purchaser and supplier of goods and services.
In China’s Atradius Payment Practices Barometer report (November 2014), 84.5% of the respondents to which were MSMEs, their Days Sales Outstanding on average clocked in at 52 days, as compared to India’s count of 65 days in 2014.
Against India’s 21.2% respondents, only 11.9% of businesses reported ‘collecting outstanding invoices’ as a challenge to profitability.
This is an excerpt from Tech in Asia. You can read the full article here. Adam Walker is founder of Hummingbill.com, a billing management software that enables businesses to sell their recurring products and services.
