Trade credit insurer Euler Hermes and UniCredit have joined forces to provide a combined finance and insurance service to Italian small and medium-sized enterprises. In a market where bankruptcy filings are expected to double, the new solution aims to offer tools to help SMEs with long-term business planning.

Credit risk in Italy still remains high due to the sizeable number of overdue payments, long days sales outstanding (DSO) and a large number of companies initiating bankruptcy proceedings.

According to Hermes, average DSOs are currently 93 days, while 13,500 bankruptcy cases are expected for the year. This is twice the number of cases pre-crisis period.

“Our partnership with the UniCredit Group combines our risk assessment and management, indemnification and collection expertise with their extensive local presence,” says Luca Burrafato, head of the Hermes Mediterranean countries, Middle East and Africa region.

“Together we can help domestic and exporting companies better manage cashflow and credit management processes, allowing them to focus on commercial growth.

“A cohesive relationship between a company, a bank and a credit insurer can create an advantageous credit chain that long-term can provide benefits across the Italian economy.”

The partnership was initially launched as a pilot project a year ago and has so far seen 1,400 companies in Italy using the service.