By Lisakhanya Mketshane, Media Sparrows
Government is pushing to formalise thousands of spaza shops and help owners access the R500 million spaza shop support Fund. The initiative aims to strengthen township and rural economies by helping small businesses become registered, compliant, and eligible for funding.
The Department of Small Business Development (DSBD), together with the South African Local Government Association (SALGA), is rolling out a nationwide process to assist spaza shop owners with registration and compliance.
The fund was launched last year in partnership with the Department of Trade, Industry and Competition (the DTIC) and is administered through the Small Enterprise Development and Finance Agency (SEDFA) and the National Empowerment Fund (NEF).
A key challenge is that only 58% of applicants have valid business licences or temporary permits issued by municipalities. Without the necessary documentation, many business owners cannot access funding.
To date, 4,522 complete applications have been received nationally, with 4,240 already assessed.
A total of 2,369 businesses have been approved for support. SEDFA has approved 1,316 applications worth R79.6 million, while the NEF has approved 1,053 enterprises valued at R99.9 million. In total, R179.6 million has been approved across all nine provinces.
Young spaza shop owners across Gauteng say the fund could be a game-changer for township businesses.
Prospective applicants are encouraged to visit their local municipality to obtain a business license or temporary permit, as this remains the biggest obstacle for many applicants. Funding applications are processed through SEDFA and the NEF.
Business owners should also look out for Department of Small Business Development outreach drives in their communities.
Approved funding may be used for stock purchases, equipment such as fridges and shelving, infrastructure upgrades, point-of-sale devices, and compliance-related costs.
The fund forms part of a broader effort to move spaza shops from the informal sector into the formal economy.
Formalization can improve access to bulk purchasing opportunities, banking services, card payment systems, financing, and other business support mechanisms.
With youth unemployment remaining a major challenge, formalized spaza shops have the potential to create jobs, keep money circulating within townships, and strengthen local supply chains.
With R179.6 million already approved, opportunities are beginning to emerge for qualifying entrepreneurs.
Young South Africans who already own spaza shops and meet the requirements are encouraged to explore the opportunities available through the fund and take steps towards formalizing and growing their businesses.