Government has approved R179.6 million in funding to support spaza shop owners across all nine provinces, despite ongoing compliance challenges among applicants to the R500 million Spaza Shop Support Fund.
The Small Enterprise Development and Finance Agency (SEDFA) has approved 1 316 applications valued at R79.6 million, while the National Empowerment Fund has approved 1 053 enterprises valued at R99.9 million.
The fund, aimed at increasing South African ownership in the township and rural retail trade sector, was launched last year by the Department of Small Business Development and the Department of Trade, Industry and Competition.
Department of Small Business Development Director-General Thulisile Manzini said on Friday the fund has continued to gain traction since implementation.
“To date, 4 522 complete applications have been received nationally, of which 4 240 have been assessed,” Manzini said at a media briefing in Pretoria.
However, the assessment process has highlighted significant structural constraints within the sector, with only 58% of applicants 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.
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.
A total of 2 369 businesses have been approved for support through the fund.
“For applications that have completed the verification and compliance process and meet all programme requirements, approval rates remain at 100%, demonstrating government’s commitment to supporting qualifying South African-owned spaza shops,” Manzini said.
The approved support includes stock purchases, point-of-sale devices, infrastructure upgrades, inventory support, business improvements, and non-financial business development support.
The fund has contributed towards government’s transformation objectives, with 43% of approved enterprises being women-owned businesses, 18% youth-owned businesses, and 2% businesses owned by persons with disabilities.
Beyond financial support, SEDFA and the National Empowerment Fund continue to provide targeted business development support, including training and compliance assistance covering business and financial management, point-of-sale systems training, digital literacy, credit management, regulatory compliance, and business formalisation support.
The implementing agencies will embark on a nationwide outreach and awareness programme from June to encourage more qualifying spaza shop owners to apply and to assist enterprises requiring compliance support.
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Manzini stressed that the fund supports South African-owned spaza shops only, with strict verification measures in place to prevent fronting and 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,” she said.
The Spaza Shop Support Fund forms part of government’s broader commitment to strengthening township economies, supporting informal businesses, creating employment opportunities, and expanding economic participation within local communities.
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