Atradius, a global credit insurance company, indicates a troubling rise in bankruptcy claims in Finland for the early months of 2024, suggesting the peak of the bankruptcy wave is yet to come. Juhani Laitala, the Country Manager for Atradius Finland, however, expresses hope for a positive shift post-summer.

Based on the number of compensation claims processed by Atradius Finland in January and February 2024, which saw a near 40% monthly increase compared to the previous year's average, the company forecasts an upsurge in bankruptcies during the first half of the year.

"The volume of compensation claims generally hints at upcoming bankruptcy numbers, and the current figures predict a continuing rise in Finland. I believe we are yet to hit the bottom, potentially reaching bankruptcy levels last seen at the end of the 1990s recession," Laitala comments.

Last year marked an exceptionally challenging period for Finnish businesses, with the number of companies filed for bankruptcy exceeding those during the 2009 financial crisis, according to Statistics Finland. In 2023, 3,315 companies were declared bankrupt, the highest number in 25 years.

Despite the gloomy start to 2024, Atradius Finland's paid insurance compensations remained slightly below last year's average. Still, the compensations in 2023 were approximately 3.5 times higher than in 2021, a year of recovery following the onset of the COVID-19 pandemic.

Laitala remains cautiously optimistic, suggesting a possible recovery later this year. "Despite a tough start, the situation isn't hopeless. We believe the market may begin to recover after the summer, potentially leading to positive news in the latter half of the year. The future will be shaped by interest rate policies and various global crises, but if the current trend continues, businesses could see an improvement within the year," he adds.

Laitala points out that small businesses, particularly those relying on a limited network of partners and unprepared for unexpected challenges, are in the most critical situation. He advises diversifying subcontracting chains to mitigate the risk of one partner's failure severely impacting the business. "Too often, small businesses depend on a single subcontractor without a full understanding of their financial situation. With reduced state support compared to during the pandemic, it's natural for small businesses to be more vulnerable," concludes Laitala.