Grafton rejects 'extortionate' credit insurance
Published: 14 September, 2009
DUBLIN: Grafton has stopped taking out credit insurance to protect itself from bad debts, citing unacceptable costs.
Colm O'Nuallain, Grafton finance director said: "The rate that credit providers were looking for was extortionate."
"So we're running our own and quite happy to do that. We have a long experience of credit management across the business," he said.
O'Nuallain said the group's decision to carry the risk of non-payment by creditors had not affected its ability to generate turnover. He said providers of credit insurance had been hit "quite hard" by the downturn in Ireland and Britain.
Earlier this year, Irish insulated panels manufacturer Kingspan warned customers that the availability of credit insurance had begun to tighten and that this could have implications for its willingness to provide credit facilities to trade customers.
The company said that changes to the credit insurance market meant that lower credit limits, shorter payment terms, and even new requirements to pay for goods in cash were likely to become increasingly common.