Most South African small firms at risk of collapse, survey finds
More than half South Africa’s small businesses don’t expect to survive for more than a year, a survey backed by lender Absa Group found.
Some 53% of the 1 600 entities canvassed for the inaugural Small Business Growth Index said they were contracting, trading with difficulty or at risk of closure, with costs of some inputs such as transport and raw materials climbing as much as 61%.
Just one in four of the firms reported that they were growing, while 55% said they may not survive longer than a year. Less than 12% anticipated remaining in business for more than two years without support to improve their access to working capital and markets. Just one in 11 was able to expand headcount.
Absa Business Banking partnered with the South African Chamber of Commerce and Industry (Sacci) in February to introduce the Small Business Growth Index, with the survey conducted by the University of South Africa’s Bureau of Market Research. The latest index score of 51.08 places South Africa’s small-business environment in the “vulnerable” zone.
The report calls for grant-based funding to be provided to early-stage, township and rural businesses, and for small firms to be given increased access to cheaper funding and training.
“Policymakers should respond with urgent, tailored and accessible financing solutions that bridge the gap between demand and supply,” said Alan Mukoki, Sacci’s chief executive officer.
“The focus must be on relieving immediate cash-flow stress, enhancing finance literacy and empowering businesses to invest in growth and resilience.”
According to the Banking Association of South Africa, small and medium-sized enterprises accounted for roughly 34% of the country’s gross domestic product.
Comments
Projects
Latest News
Showroom
BOVA cemented their reputation in Africa by delivering high quality engineering through their range of safety footwear. 21 years after producing...
VISIT SHOWROOM
Established in 1982, Invincible Valves is a medium-sized enterprise in Germiston, serving global and local markets.
VISIT SHOWROOM
Press Office
Announcements
What's On
Subscribe to improve your user experience...
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation
