About 38% of large retailers and 28% of small and medium-sized retailers have said that the reduction or withdrawal of credit insurance has negatively impacted their businesses and want the trade top-up scheme extended beyond the end of this year.
According the British Retail Consortium, 92% of large firms and 74% of small and medium sized firms also feel that trade credit insurers do not asses risk accurately.
One retailer criticised credit insurers for applying “industry-wide criteria to individual companies without looking at specific company circumstances. It is easier for the risk assessors to just repeatedly say ‘No cover’ rather than argue for the insured company.”
The temporary Trade Credit Insurance Scheme introduced by the government in its April budget comes to an end on December 31 and 77% of large businesses and 59% of smaller retail businesses believe this should be extended.
Several retail businesses including Woolworths were severely impacted by the withdrawal of credit insurance, a move partly blamed for the collapse of the 800-store chain.
BRC business environment director Tom Ironside said: “It’s vital to retain credit insurance – especially in the important run-up to Christmas period and beyond.
“The top-up insurance scheme is due to finish at the end of this year and VAT is returning to its higher level at the same time. To prevent the retail recovery and the three million jobs provided by the sector being undermined, the top-up scheme must be retained into 2010.”