South African startup M4Jam to close down

Updated on 17 March 2016

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M4JAM has announced that it will cease trading after failing to make a profit, the company’s CEO Andre Hugo has told Fin24.

The digitally enabled microjobbing platform hosted on WeChat was launched in 2014. It allowed companies to allocate simple microjobs to thousands of ‘jobbers’ across the country and pay them via M4JAM and MTN Mobile Money. Microjobs are  a very small paid task which can vary in duration from a day to a few hours.

M4JAM was unable to achieve profitability within the investment time frame,” Hugo told Fin24 via an email response.

“As a result the board has decided to cease trading and sell the assets to interested parties over the course of the next month.

“We are in the process of meeting with a number of interested parties currently. If we are successful the business will be restructured. If not the business will be closed. Therefore we are urging jobbers to cash out their wallet balances,” he said. (Fin24)

How SMEs will be impacted by a possible interest rate hike

A further hike in interest rates, whether it takes effect now or later during the year, would put more pressure on consumers, leaving businesses with no choice, but to absorb costs in the short-term as profit margins continue to shrink, says Yudhvir Seetharam, head of analytics at FNB Business.

Seetharam says that apart from the direct impact on SMEs’ cash flow and ability to service debt, interest rate increases hamper consumer confidence, their ability to spend and save, which ultimately has a direct impact on the bottom line of small businesses.

As economic conditions continue to get tougher, small businesses that are eager to drive sales will start competing for the attention of consumers who are already cutting back on spending, he adds.

Farmers encouraged to take a long-term view

Agriculture can also become a social and financial investment vehicle that is capable of driving positive change at national and regional levels. This is the message by Standard Bank’s Head of Agribusiness SA, Nico Groenewald, who was speaking at Standard Bank’s annual roadshow held in Stellenbosch last week. Groenewald encouraged primary producers to take a long-term view rather than being caught up in the immediate crisis of the country’s worst drought in 80 years.

“All of us in agriculture know that it is a cyclical sector and that weather is a fundamental but unpredictable factor, for which we must continuously evolve better strategies.”

“For all sorts of reasons, therefore, it’s time for farmers to look at the work they do as a type of investment vehicle.”

“That sounds theoretical. It’s extremely practical. New agricultural strategies are giving rise to new up- and downstream business opportunities in which conventional investors can be persuaded to take a stake. Farmers can either create investment opportunities or participate in them. Either way, they gain a share of the value chain upside that they don’t currently have. It also enables them to influence the direction in which agriculture evolves and, thereby, how effectively it serves both farmers and humanity.”

For most farmers, however, with or without drought conditions, funding remains a challenge. “Again, the solution lies in looking at agriculture as an investment vehicle rather than purely as a tactical, operational exercise undertaken season by season,” Groenewald mentioned. (Bizcommunity)

Read Also: New startup to create 100 000 microjobs

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