Despite compliance challenges among applicants to the R500 million Spaza Shop Support Fund, government has approved R179.6 million in funding to support shop owners across all nine provinces.
The fund, aimed at increasing the participation of South African-owned spaza shops in the townships and rural areas retail trade sector, was launched last year by the Department of Small Business Development (DSBD) and the Department of Trade, Industry and Competition (the dtic).
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 programme is being implemented through the Small Enterprise Development and Finance Agency (SEDFA) and the National Empowerment Fund (NEF).
“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,” Department of Small Business Development Director-General Thulisile Manzini said on Friday at a media briefing in Pretoria.
Manzini added that the assessment process continues to highlight a key structural constraint 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.
“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,” she said.
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,” she said.
The approved support includes stock purchases, point-of-sale devices, infrastructure upgrades, inventory support, business improvements, and non-financial business development support designed to improve sustainability and competitiveness within the township and rural retail sector.
“The Fund has also contributed meaningfully 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.
“This demonstrates the Fund's contribution towards broadening economic participation and supporting greater inclusion within township and rural economies,” Manzini said.
Beyond financial support, the Fund is designed to drive long-term sustainability.
SEDFA and the NEF continue to provide targeted business development support, including training and compliance assistance.
This covers areas such as business and financial management, point-of-sale systems training, digital literacy, credit management, regulatory compliance, and business formalisation support.
In addition, the implementing agencies will once again embark on a nationwide outreach and awareness programme from June 2026 to encourage more qualifying spaza shop owners to apply and to assist enterprises requiring compliance support.
“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.
“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,” she said.
Manzini stressed that the Fund supports South African-owned spaza shops, 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 added. -SAnews.gov.za
