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French SMEs: Fragile and Essential

Jean-Marc Pillu Directeur général, Coface. Contact : jean-marc_pillu@coface.com.
Yves Zlotowski Économiste en chef, Coface. Contact : yves.zlotowski@coface.com.


SMEs of critical size (between 10 and 150 employees) are key to the French growth dynamic. They represent more than one third of total value added and employment. It turns out that those large SMEs are over represented in total corporate insolvencies. Their numbers doubled compared to pre-crisis level and has not diminished yet. On the one hand, the weakening of private consumption pace weighs on companies often focused on domestic markets. On the other hand, the deterioration of their financial situation increases their vulnerability. Finally, the importance of supplier debt and “hidden” payment delays are major constraints. For example, SMEs in the construction sector are often squeezed between large companies, on the client side and on the supplier side. Clients pay late and suppliers ask for quick payments. A protection of receivables seems important while credit insurance is underused by SMEs. Those companies acknowledge sometimes too late the risk associated with claims from clients. A simplified credit insurance offer, for SMEs is therefore a useful instrument, amongst others, favouring risk prevention.


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