By Thebe Mabanga
The government’s Spaza Shop Support Fund has disbursed about R180 million to 2,369 businesses, but officials say compliance with registration, health and environmental requirements remains a significant challenge.
The Department of Small Business Development and the Department of Trade, Industry and Competition (DTIC) provided an update on the R500 million programme, which is being implemented through the Small Enterprise Development Finance Agency (SEFDA) and the National Empowerment Fund.
The fund was launched in April 2025, following a presidential announcement on a spaza shop registration drive in November 2024 amid concerns over food safety incidents linked to township retail outlets.
Authorities say municipal records initially indicated about 82,000 spaza shops had registered nationally. However, subsequent verification reduced the figure to 44,696 confirmed businesses, of which about 15,000 have obtained trading permits or licences.
“Registration does not equate to licensing,” said Department of Small Business Development Director-General Thulisile Manzini.
“Spaza shop owners are therefore required to secure trading permits or licences through their respective municipalities to achieve full compliance and access funding opportunities.”
Manzini said the process has been slowed by administrative backlogs, reliance on manual systems, shortages of health and environmental inspectors, and complex zoning requirements.
The department said 4,522 complete applications have been received nationally, with 4,240 assessed. Only 58% of applicants were found to be linked to valid business licences or temporary permits.
“As a result, a significant number of applications remain unable to progress until licensing and compliance requirements have been addressed,” the department said.
To date, 2,369 businesses have been approved for funding.
The Small Enterprise Development Finance Agency has approved 1,316 applications worth R79.6 million, while the National Empowerment Fund has approved 1,053 enterprises valued at R99.9 million, bringing total approvals to R179.6 million across all nine provinces.
The support includes stock purchases, point-of-sale devices, infrastructure upgrades, inventory support and broader business development assistance aimed at improving sustainability in township and rural retail sectors.
Officials said the approval rate highlights structural challenges in the sector, with only 5% of registered businesses and 52% of completed applications receiving funding.
Manzini said local spaza shop owners continue to face intense competition from established retailers and foreign-owned businesses, particularly in bulk purchasing power.
She said the fund is intended to help local operators pool resources and reduce input costs to improve competitiveness.
The department also reported that 43% of approved beneficiaries are women-owned businesses, 18% youth-owned, and 2% owned by persons with disabilities, describing this as evidence of progress in broadening economic participation.
SEFDA Acting CEO Nkosikhona Mbatha said strict verification measures are in place to prevent fronting and abuse of the programme.
“Only applicants who meet ownership, compliance and operational requirements, and who possess valid trading permits or licences, are approved,” he said.
The Spaza Shop Support Fund, officials said, forms part of government efforts to strengthen township economies, support informal businesses and expand employment opportunities.
The update comes amid heightened tensions over undocumented migration, with some anti-immigration groups calling for a June 30 deadline for foreign nationals to leave the country.
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