Why SMMEs tend to fail at infancy

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Former Alexandra resident Annah Kganyago graduated from the Regenesys Business School with a Masters in Business Administration.

Her thesis was on why small to medium enterprises fail in the first two years of inception.

Kganyago, an investment associate at the National Empowerment Fund is at the forefront of the development of small and medium enterprises.

She said lack of funding of small to medium enterprises was a major contributor to the failure of many small businesses, although there were other factors at play. These included the economic downturn, marketing strategies, business plans and cash flow management.

“The problem is that when some people get funding for their businesses they tend to buy expensive cars instead of investing the money in the business,” Kganyago said. She said to reduce the failure rate, mentorship programmes have been put in place.

“The failure rate is just too high and statistics stand to prove it. We have also noticed this as well in the businesses that we fund,” she said. “It was the constant collapse of these small businesses that we fund which triggered me into doing an MBA and choosing the thesis I researched on,” she said.

Kganyago started her career at Nedbank and later moved to Landbank where she was headhunted. She did a diploma in accounting at the then Rand Afrikaans University (University of Johannesburg) in 1996.

She furthered her studies at Unisa where she studied for a Bachelor in Accounting Sciences, but did not complete it. “I just got bored and realised it was not for me, and I was in my third year,” she said.

Growing up in Alexandra, Kganyago dreamed of being a teacher but was discouraged by her sister. “Teaching and nursing were the dominating careers in those days but I’m glad I didn’t go for it because I love what I do now,” she said.

Although she does not live in Alex now, Kganyago still regards it as her home and spends a lot of time in the township with her cousins and nieces. She described herself as an extrovert who is curious and passionate about life. She is a mother of two girls and loves going to church and regularly donates shoes to school children in Alex.