By Johnathan Paoli
The government has officially launched the long-awaited R500 million Spaza Shop Support Fund, which is aimed at transforming township economies by empowering spaza shop owners and informal businesses.
The launch event in Soweto was led by Small Business Development Minister Stella Tembisa Ndabeni-Abrahams and Trade, Industry and Competition Minister Parks Tau, marking a significant milestone in South Africa’s economic inclusion agenda.
First announced by President Cyril Ramaphosa in November last year, the fund is jointly administered by the National Empowerment Fund and the Small Enterprise Development Finance Agency.
It provides both financial and non-financial assistance to South African-owned spaza shops and community convenience stores, particularly those operating in underserved townships and rural areas.
Tau emphasised the government’s commitment to revitalising the informal economy.
“The R500 million Spaza Shop Support Fund is an investment in the grassroots economy. It enables spaza shop owners, many of whom are women and youth, to contribute meaningfully to economic growth while uplifting their communities,” he said.
He reiterated that fund was not only about business development, but also about formalising and safeguarding informal traders following last year’s food-borne illness outbreak.
“This is a holistic approach to creating sustainable, secure and thriving businesses,” Tau said.
The fund offers a range of support mechanisms, including financial support for stock purchases through delivery channel partners and infrastructure upgrades (shelving, refrigeration, point-of-sale systems, security).
Additionally, it will support business development training in digital literacy, financial compliance, food safety and credit health; and facilitate access to bulk purchasing and partnerships with local manufacturers, black industrialists, and wholesalers.
Ndabeni-Abrahams highlighted the fund’s role in fostering job creation and poverty alleviation.
“This is about more than just funding. It’s about helping entrepreneurs thrive, grow their businesses and build wealth in their communities. The spaza shop sector is a key driver of township economic activity and deserves strategic support,” she said.
The fund has a tiered funding model, with amounts ranging from R50,000 to R300,000.
Those receiving up to R50,000 will get R40,000 worth of stock and R10,000 for business support.
For those requesting between R100,000 and R300,000, 50% of the funding will be a repayable loan, while the other half will be a non-repayable grant.
During the launch, testimonies from spaza shop owners illustrated the pressing need for accessible funding and how such support could transform their businesses.
While the launch was widely praised, concerns about transparency have been raised.
Black Business Unity welcomed the initiative but criticised the lack of disclosure regarding past and current beneficiaries of government business support.
Spokesperson Mike Molloyi called for the publication of selection criteria, demographic breakdowns and a comprehensive list of recipients.
“If we are serious about transformation, we must ensure fairness, accountability and open access to information,” he said.
In response, Ndabeni-Abrahams assured that robust monitoring and evaluation systems would be implemented, and that the application process would be open, fair and transparent.
The event also featured input from key stakeholders, including Gauteng finance and economic MEC Lebogang Maile, Joburg mayor Dada Morera and NEF CEO Mziwabantu Dayimani, who outlined NEF’s role in managing the fund.
With applications officially opening on Tuesday, Tau said the government hoped the fund would become a cornerstone in building a more inclusive, resilient and locally driven economy, where township businesses were no longer sidelined but celebrated as key players in national development.
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