Abstract
M.B.A.
With South Africa's formal economy creating only a trickle of new jobs, the small
business sector would seem the only opportunity for our legions of unemployment.
Despite this need the South African financial system in which both bankers and
government guarantee agencies, still shy away from the sector most in need of
capital. Aspiring entrepreneurs without capital or a proven track record running a
business can prove difficult,
The greatest challenge facing small business in South Africa, whether in its initial
stage or through its growth stage, is the difficulty of obtaining finance from the
banks or other financial institutions.
When George Smith started his business in Roodepoort, west of Johannesburg in
1990, he entered into a partnership with his brother. They acquired a convenience
store from Metcash Ltd., one of the biggest retail companies on the Johannesburg
.Stock Exchange. Jazz Stores closed all its branches country wide due to major
losses incurred (Smith, 1999).
As young entrepreneurs they had a vision that a convenience store at a taxi rank
could be profitable. Their biggest constraint was the lack of capital to finance the
purchasing of the store, nevertheless the store was reopened soon after the
purchase and the revamping was done in stages. Thanks to some of their friends
and family who helped them financially...