The Spaza Shop Support Fund (SSSF) is a government initiative that is designed to strengthen township-based spaza shops that form a critical component of South Africa’s informal economy. These shops tend to operate informally but they provide essential goods, create employment, and offer accessible retail services to underserved populations.
Spaza shops, however, face significant operational challenges that threaten their viability. They compete against large retail chains with superior purchasing power, while lacking adequate access to capital and business development resources. Food safety compliance issues undermine consumer trust, and high operational costs erode profitability and competitiveness. We have highlighted some of the issues that deal with competition in this article https://businessgeniuses.co.za/can-compliant-spaza-shops-compete/.
The objective of the Spaza Shop Support Fund
The Spaza Shop Support Fund aims to create a sustainable retail environment in the townships that reflects the important role that spaza shops play in township economies across South Africa. The objective is to enhance the long-term sustainability of businesses in the sector through providing comprehensive support mechanisms targeting financial, operational, and developmental needs. The objective is to ensure that spaza shops are brough in line with key compliance requirements, including food safety.
The sector also experiences social and economic tensions related to foreign ownership patterns that have altered market dynamics within township communities. These challenges collectively impact local entrepreneurship and economic participation.
Eligibility
- Be 100% South African owned and managed. The South African owner must be actively running the business;
- Located in a rural or township area;
- Meet municipal licensing requirements, including compliance to municipal by-laws, registration requirements, food handling regulations, etc.; and
- Compliance with legislation, including CIPC and SARS. To be funded for over R80,000, the business must be registered at the CIPC.
Spaza shops owned and operated by youth, women and people with disabilities are encouraged to apply and will get priority.
What does the Spaza Shop Support Fund offer?
Spaza shops owners can apply for up to R100 000 in funding and this is broken down as follows:
- Maximum R40 000 for stock – through a selected delivery partner Unitrade Management Services to activate the ‘Bulk-buying” and other support requirements. This funding is provided as a grant.
- Maximum of R50 0000 for asset and infrastructure upgrade, for example fridges, shelving, security. This funding is provided as a combination of a grant and a loan with favourable terms.
- Maximum R10 000 for non-financial support, including training, food safety, technology, point of sale devices, etc.
To Apply:
There is no deadline to apply but applications can be submitted to SEDFA using this link.
Conclusion
This initiative is looking to help spaza shops become legitimate players in the supply chain by giving them the support they need to compete. The program understands that spaza shops, just like other businesses, need some help to meet required regulations. By using this support, township businesses can sort out their compliance problems and improve their competitiveness. The main goal, however, is to create a fair playing field where all township businesses follow the same rules and compete on equal terms.
Further Information
One of our objectives is to empower small businesses and startups by curating funding opportunities that we come across. Refer to this page for other opportunities.
While formal company registration is not always a prerequisite for accessing funding, it is crucial for formalised entities to maintain compliance. Lack of proper governance will completely hinder any prospects of funding. For guides and articles on governance, please refer to this section of our site.
