Japanese Firms Rank Low on SME Payment Practices

Economy | August 5, 2025
Japan SMEs payment ratings business practices economy

15 Japanese firms have received the lowest ratings for their payment practices towards Small and Medium Enterprises (SMEs). This evaluation, reflecting delayed payments or unfavorable terms, has alarmed local stakeholders and drawn attention to the financial health of these small businesses. While the specific companies have not been named, this issue prompts a call for a better financial framework for SMEs in Japan to ensure their survival and growth.

Payment practices and their impact on SMEs are a significant concern in Japan, home to a large number of such businesses. Fair business practices, including timely and reasonable payments, are considered a social responsibility, impacting both the economy and society. This incident taps into these values and likely fuels discussions about business ethics, responsible practices, and policy reform in Japanese business circles.

In the US and EU, payment practices towards SMEs can provoke legal disputes and policy changes. There are regulations in place in many EU countries, and in some areas of the US, requiring prompt payment to SMEs to safeguard their interests and business continuity.

Information for Your Country

Non-Japanese SMEs can consider implementing safeguard measures, like seeking legal counsel or establishing strong contracts when engaging in business with Japanese firms. They could also refer to resources evaluating payment practices globally for reference, such as the Global Payment Practices Barometer by Atradius.