We don't know that only a few genin graduate every year. Looking at episode 1, there are at least 27 kids in Naruto's class (3 to a desk, 9 desks in the room). After the exam, about 7 or so minutes in, you see all the graduates out front wearing their headbands. It's a blurry shot, but looks like at least 20 kids in there with their parents. We don't know how many times the exam is held, every quarter, semester, end