Government is intensifying efforts to help spaza shop owners formalise businesses, access funding and strengthen local economies through targeted support programmes.
Government is stepping up efforts to assist thousands of spaza shop owners across South Africa to formalise their businesses, improve compliance and access financial support through the R500 million Spaza Shop Support Fund.
The initiative, led by the Department of Small Business Development (DSBD) in partnership with the South African Local Government Association (SALGA), aims to help small and informal businesses overcome barriers to registration and compliance while increasing participation in the formal economy.
As part of the intervention, government will roll out a nationwide outreach and awareness campaign from June 2026 to encourage more qualifying entrepreneurs to apply for support through the fund.
The campaign will provide practical guidance to business owners on meeting compliance requirements, improving business operations and accessing funding opportunities designed to help businesses grow and become more sustainable.
The Spaza Shop Support Fund was launched by the Department of Small Business Development and the Department of Trade, Industry and Competition (the dtic) and is implemented through the Small Enterprise Development and Finance Agency (SEDFA) and the National Empowerment Fund (NEF).
To date, 4,522 complete applications have been received nationally, with 4,240 already assessed.
According to the departments, compliance remains one of the biggest challenges facing applicants.
“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,” the departments said in a joint statement.
Despite these challenges, the fund continues to gain momentum, demonstrating strong demand from entrepreneurs seeking support to formalise and expand their businesses.
To date, 2,369 businesses have been approved for support.
SEDFA has approved 1,316 applications valued at R79.6 million, while the National Empowerment Fund has approved 1,053 enterprises worth R99.9 million.
Together, the two agencies have approved approximately R179.6 million in support across all nine provinces.
Funding support includes stock purchases, point-of-sale devices, infrastructure upgrades, inventory support and business development services aimed at improving long-term sustainability and competitiveness.
Beyond financial assistance, the programme also provides training and mentorship in areas such as business management, financial management, digital literacy, credit management, regulatory compliance and business formalisation.
The fund is also contributing towards broader transformation objectives. Women-owned businesses account for 43% of approved enterprises, while youth-owned businesses represent 18% and businesses owned by persons with disabilities account for 2%.
Government believes the initiative will play an important role in strengthening township and rural economies, creating jobs, supporting local entrepreneurship and expanding economic participation within communities across South Africa.
