The system for detecting and dealing with SMEs in crisis is “adequate” in France, but its results are “disappointing”, the Court of Auditors said in a report published on Friday.
He points out that these companies with fewer than 250 employees “represent the majority of the French productive fabric with 99% of companies, 49% of employees and 40% of added value”, and that the expiration of the support measures implemented during Covid “reinforced the challenge of quickly detecting their difficulties”. Currently, business bankruptcies are exceeding their pre-Covid level.
Detecting and helping SMEs in difficulty
There are two networks to address these issues, emanating from two different directorates of the Ministry of Economy, the Directorate General of Public Finance (DGFiP) and the Directorate General of Enterprises (DGE), while the Ministry of Labour and Urssaf also propose solutions, such as regional councils, commercial courts, chambers of commerce and associative structures.
In 2021, the State launched the “universal entry point” to help these companies navigate, through “departmental crisis exit advisors”, located in the departmental directorates of public finances (DDFiP). The digital project “Weak Signals” also allows the administration to detect risks of failure.
But this system, which is both “plentiful” and “fragmented,” according to the Court, has a “disappointing” track record at this stage. Indeed, businesses and other stakeholders still have difficulty identifying the departmental adviser; they “rarely” respond when management contacts them through “weak signals.” Departmental advisers do not “sufficiently” direct business leaders to the right structures and tools.
A “thorough evaluation” is required
The Court notes that the procedures for handling the debt are “multiple” – disclosure of payments to public creditors, loans, audits, credit mediation, amicable procedures, support for entrepreneurs, etc. – with different impacts and little known to the public.
Using his own figures, he found that one-year survival rates for companies varied widely depending on the procedure, from 72% following an amicable procedure to 86% in the case of a rescheduling of tax and social security debts.
The report recommends, in particular, local collaboration agreements for a smoother “user journey”, or that DGFiP and Urssaf systematically inform business leaders about support solutions in the event of non-payment of taxes or contributions. It also calls for “an in-depth evaluation” of the effectiveness of the procedures by the services concerned.
Source: BFM TV
