France-based credit insurer Coface has upgraded Singapore’s country rating from A2+ plus to A1, the top-tier category in the latest country risk assessment report. The report also revealed that corporate non-payments in Singapore have improved to about S$100 million (US$71.67 million) a month currently, down from S$376 million (US$269.48 million) a month last year. Singapore held an A1 rating before the economic turbulence and was later downgraded to A2+ during the turmoil.

In Asia Japan is the only other country which shares an A1 rating while Singapore’s close neighbors Malaysia and Hong Kong have an A2 rating. Singapore’s high credit rating conveys that the Singapore based companies show strong commitment to fulfill their payment liabilities and thereby suppliers who extend loans or credit facility can be rest assured of repayment.

The rating is another feather in the cap for Singapore’s image as a commercial hub of the region. Companies operating out of Singapore readily gain a credible image which is very essential when they are dealing in trading businesses, where a lot of the transactions are carried out on credit terms. As procurement capital of Asia encompassing the requisite infrastructure Singapore attracts large number of procurement and indenting houses. For the supplier companies in regional manufacturing economies, the rating renders added assurance when dealing with Singapore companies.

During tough economic situation and amidst growing competition companies are forced to extend substantial credit terms to the customers. Asia is becoming a much sought after market but the nature of the market is such that there are many potential risks such as political risks and payment defaults which are beyond the control of companies. It is now a necessity to cover such risks when operating in politically tumultuous markets or in markets where probability of defaults are high. By means of a wide spectrum of underwriters Singapore provides comprehensive risk management solutions to companies engaged in cross-border investments within the region.

Commenting on the credit rating Ms. Jacqueline Low, the Director of Singapore company registration agency Janus Corporate Solutions said “Such credit rating sets some order amidst chaos, and this is essential when it comes to enterprises engaged in investments or trade across borders. For Singapore based companies this provides an additional edge to compete in the market apart from world class ports, infrastructure and a network of international financial institutions. Risk mitigation is a key concern for companies when they are striving to come out of the turbulence and risk insurance service providers ease their predicament largely and stimulate them to venture out.  Unsurprisingly the all-inclusive enterprise eco system attracts so many foreign companies to incorporate a company in Singapore or to open up a branch office”.