Millions approved for spaza shop support fund but hundreds fail compliance checks
· Citizen
The government has approved R179.6 million in funding for more than 2 300 spaza shops across South Africa, despite ongoing compliance and licensing challenges that continue to prevent many applicants from accessing support.
The funding forms part of the R500 million spaza shop support fund launched last year by the Department of Small Business Development (DSBD) and the Department of Trade, Industry and Competition (DITC) to strengthen South African-owned spaza shops operating in townships and rural communities.
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Speaking during a media briefing in Pretoria on Friday, Department of Small Business Development Director-General Thulisile Manzini said the programme continues to attract significant interest from small business owners nationwide.
“Since implementation, the fund has continued to gain traction, reflecting the scale of demand for the fund.
“To date, 4,522 complete applications have been received nationally, of which 4,240 have been assessed,” said Manzini.
More than 2 300 businesses approved
The Small Enterprise Development and Finance Agency (SEDFA) had approved 1 316 applications worth R79.6 million, while the National Empowerment Fund (NEF) approved 1 053 enterprises valued at R99.9 million.
Together, the two implementing agencies have approved support for 2 369 businesses.
The approved funding covers stock purchases, point-of-sale devices, infrastructure upgrades, inventory support and other business improvements.
Beneficiaries also receive non-financial business development support aimed at improving sustainability and competitiveness.
Manzini said businesses that successfully complete verification and compliance processes have been fully supported.
“For applications that have completed the verification and compliance process and meet all programme requirements, approval rates remain at 100%, demonstrating the government’s commitment to supporting qualifying South African-owned spaza shops,” she said.
Licensing remains a major obstacle
Despite the programme’s progress, compliance remains a significant challenge for many applicants.
According to Manzini, only 58% of applicants are linked to valid business licences or temporary permits issued by municipalities.
“As a result, a significant number of applications remain unable to progress until licensing and compliance requirements have been addressed,” she said.
Verification and site inspections have also uncovered several irregularities.
“As part of ensuring the integrity of the programme, site visits and verification processes have identified 354 applications that could not proceed due to non-compliance, including non-existent businesses, ownership discrepancies, and inconsistencies between applicants and operators,” Manzini said.
She stressed that the fund is reserved for South African-owned spaza shops and that strict due diligence measures are in place to prevent abuse.
“Only applicants who meet ownership, compliance and operational requirements, and who possess valid trading permits or licences, are approved.
“The due diligence processes applied to the programme are specifically designed to identify and mitigate risks such as fronting,” Manzini added.
Focus on inclusion and sustainability
The department said the fund is also contributing to the government’s transformation goals.
According to Manzini, 43% of approved enterprises are women-owned, while 18% are youth-owned businesses and 2% are owned by persons with disabilities.
“This demonstrates the fund’s contribution towards broadening economic participation and supporting greater inclusion within township and rural economies,” she said.
Beyond funding, SEDFA and the NEF continue to provide training and compliance support covering financial management, digital literacy, point-of-sale systems, credit management, regulatory compliance and business formalisation.
The government will also roll out a nationwide outreach and awareness campaign from June to encourage more qualifying spaza shop owners to apply and assist businesses that still need to meet compliance requirements.
“The spaza shop support fund forms part of the government’s broader commitment to strengthening township economies, supporting informal businesses, creating employment opportunities, and expanding economic participation within local communities.
“Through targeted support for women, young entrepreneurs and other designated groups, the Fund contributes to building a more inclusive and representative economy while advancing the objectives of economic transformation and localisation,” Manzini concluded.