Government intensifies support for spaza shops through R500 million fund

Government is stepping up initiatives aimed at helping thousands of spaza shop owners formalise their businesses and gain access to financial support through the R500 million Spaza Shop Support Fund.

The Department of Small Business Development (DSBD), working alongside the South African Local Government Association (SALGA), is finalising a nationwide programme to assist informal and small businesses with registration and compliance requirements needed to qualify for government support.

The intervention seeks to remove key barriers that prevent many entrepreneurs from participating fully in the formal economy by helping them obtain the necessary licences and permits.

As part of the programme, government will relaunch a nationwide awareness and outreach campaign in June 2026 to encourage eligible spaza shop owners to apply for funding. The campaign will provide guidance on compliance requirements, application procedures and opportunities available through the support fund.

The initiative forms part of government's efforts to strengthen township and rural economies by increasing the participation of South African-owned spaza shops in the retail sector, while promoting job creation and local economic development.

Launched by the Department of Small Business Development and the Department of Trade, Industry and Competition (dtic), the fund is administered by the Small Enterprise Development and Finance Agency (SEDFA) and the National Empowerment Fund (NEF).

To date, 4,522 complete applications have been submitted nationwide, with 4,240 already assessed. However, government says compliance remains a major challenge, as only 58% of applicants have valid business licences or temporary municipal permits.

This has prevented many applications from progressing further in the approval process until the necessary regulatory requirements are met.

Despite these challenges, interest in the fund remains strong, highlighting the growing demand among entrepreneurs seeking financial and business support to expand and formalise their operations.

So far, 2,369 businesses have been approved for assistance. SEDFA has approved 1,316 applications valued at R79.6 million, while the National Empowerment Fund has approved 1,053 businesses worth R99.9 million.

Together, the two agencies have approved approximately R179.6 million in support across all nine provinces.

Funding assistance includes stock purchases, point-of-sale equipment, infrastructure improvements, inventory support and other business enhancement initiatives. Beneficiaries also receive non-financial support aimed at improving business sustainability and competitiveness.

In addition to funding, SEDFA and the NEF continue to provide training and development programmes covering business management, financial administration, digital literacy, credit management, compliance requirements and business formalisation.

The fund is also contributing to government's transformation agenda. Women-owned enterprises account for 43% of approved businesses, while youth-owned enterprises represent 18%. Businesses owned by persons with disabilities make up 2% of approved beneficiaries.

Government says the initiative is helping to broaden economic participation, support inclusive growth and strengthen township and rural economies across the country.