MACM President Charles Xuereb urges companies to report payment defaults as uncertainty increases

Companies should maintain a cautious approach to credit and make greater use of payment-default information as geopolitical and economic uncertainty continues to weigh on businesses, Malta Association of Credit Management (MACM) President Charles Xuereb has said.

Addressing the MACM’s Annual General Meeting, Mr Xuereb urged members to continue reporting payment defaults to the association, arguing that greater information-sharing would help businesses assess customers and make better-informed credit decisions.

“The more openly we share what we know, the better placed our members are to understand their customers, to weigh risk properly, and to make credit decisions on a sound footing,” he said.

Mr Xuereb said that while a more favourable interest-rate environment could ease liquidity pressures and encourage suppliers to extend credit more readily, businesses should remain cautious.

“Prudence must remain our watchword,” he said, urging companies to keep a close eye on debtors and maintain rigorous credit-management practices.

He said effective credit management extends beyond recovering overdue debt, encompassing sustainable sales, cash-flow protection, risk assessment and the development of long-term commercial relationships.

His comments come as MACM marks its 25th anniversary, having been established in 2001. Mr Xuereb said the association had continued to adapt through major changes including Malta’s EU accession, the adoption of the euro, the global financial crisis, rapid digitalisation and the COVID-19 pandemic.

He highlighted geopolitical tensions, inflation, shifting interest rates and strains on international trade as ongoing sources of uncertainty for businesses and credit markets.

The association is also investing in new tools to help businesses assess credit risk. MACM holds a 50% shareholding in Malta Credit Bureau Ltd, which is licensed as a credit reference agency by the Central Bank of Malta.

The MACM President said a project to introduce credit scoring in Malta had been approved for EU funding under the Digitalise Your Business Scheme, effectively covering half of the cost of the investment.

The planned system will draw on credit data from multiple sources and use analytical models calibrated for local conditions to produce a score expressing the credit risk associated with an individual or company, including the probability of default.

According to Mr Xuereb, the service is intended to make increasingly complex credit information easier for businesses, particularly SMEs, to interpret when assessing prospective customers.

He said the system could help businesses reduce risk, strengthen commercial relationships, protect cash flow and improve profitability through better credit management.

Mr Xuereb also highlighted the growing role of technology, automation, data analytics and artificial intelligence in assessing creditworthiness and managing risk.

He said MACM must keep pace with these developments while ensuring that professional judgement, experience and established credit-management principles remain central to the profession.

The association continues to enjoy a “healthy financial position”, he said, while membership has continued to grow. He said this provided a foundation for further investment in services, innovation and professional development.

Reflecting on MACM’s 25 years, Mr Xuereb said the anniversary represented a quarter-century of professional development, education, information-sharing and collaboration among Malta’s credit professionals.

He said the association’s focus for the coming years would be to continue adapting to technological change and emerging risks while remaining relevant to the needs of Malta’s business community.