Moroccan Small Businesses Face Financial Crisis Over Unpaid Saudi Debts
Several Moroccan very small enterprises (VSEs) are facing cash flow difficulties, following the refusal of payment by certain Saudi groups. They will have to pay royalties estimated at nearly 15 million dirhams to avoid late payment penalties and sanctions from the Commercial Court.
According to Hespress, since 2017, Moroccan companies have been constantly demanding their due from companies belonging to Saudi businessmen, for real estate and tourism projects completed in 2016. Some have even gone bankrupt.
The new control measures put in place by the Ministry of Finance to protect small businesses impose late payment penalties of 5.25% of the amount of unpaid invoices within 90 days. This rate is likely to rise to 6.25% from 2021.
With these new provisions, the State aims to ensure the survival of companies and reduce the risk of bankruptcy, which affected nearly 28,800 companies between 2015 and 2018 due to cash flow problems related to non-payment of public and private contracts.
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