South Africa SME Failure Rates High, Index Shows 55% Risking Survival
- Reports
- 2
- Developments
- 1
- Repetition
- 50%
New informationRepeats or wire copies
What happened
The Small Business Growth Index, compiled by Absa, the South African Chamber of Commerce and Industry, and the Bureau of Market Research at Unisa, found that 55.3% of small and medium-sized enterprises in South Africa could survive only 12 months under current cost pressures. Research from the University of the Western Cape suggests that 70% to 80% of small, medium, and micro enterprises fail within five years. The index also noted that more than 66% of firms reported sharp cost increases.
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Why it matters
The high rate of SME failure and reported cost increases indicate significant financial strain across the sector. This situation suggests that the economic stability of South Africa could be negatively affected by the widespread struggle of small businesses.
Small and medium-sized enterprises are integral to the South African economy.
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Who's involved
- University of the Western CapeUniversity that conducted research suggesting high SME failure rates in South Africa.
- South AfricaCountry where the high SME failure rates were documented.
Who could feel it
Possible knock-on effectsThese are possibilities Brind reasoned out, not predictions, and not advice. Most are not stated in any report.
- BakkieSpeculative
SME reports of sharp cost increases, particularly for transport and fuel, might negatively impact the Bakkie segment's costs.
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The entities involved
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University of the Western Cape
university in Bellville, Cape Town, South Africa
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