In a significant move to take South Africa’s informal economy to new heights, the government has introduced the R500 million Spaza Shop Support Fund.
This initiative aims to empower township and rural entrepreneurs by providing financial and non-financial support to spaza shop owners, facilitating their transition into the formal economy and enhancing their competitiveness.
If you’re a spaza shop owner, this article will outline all that you need to know to qualify and apply for the fund.
Who Qualifies for the Spaza Shop Fund?
Before diving into who qualifies for the Spaza Shop Fund, it’s paramount to highlight why this initiative was brought about. The fund aims to support the development and upliftment of township and rural convenience shops – mainly spazas.
The funding received by these businesses will be both financial and non-financial, and will be used to upgrade and grow these shops, as well as provide support for compliance, capacity, and skills building.
To ensure the fund reaches its intended beneficiaries, specific eligibility criteria have been established:
- South African Citizenship: Applicants must be South African citizens or naturalised citizens before 1994.
- Location: The spaza shop must operate within South Africa, specifically in rural or township areas, serving local communities.
- Municipal Registration: The business must be registered with the local municipality in accordance with relevant by-laws and business licensing requirements.
- SARS Registration: The shop must be registered with the South African Revenue Service (SARS).
- CIPC Registration: While this isn’t a hard requirement to receive funding for your spaza, a CIPC registration can save your business from being excluded from receiving funding above R80 000.
- Owner Management: The owner must actively manage the spaza shop.
- Compliance with Legislation: The shop must comply with all spaza shop food, health, and safety regulations necessary for it to operate.
Why is the Fund Only for 100% South Africans?
The fund is exclusively available to South African citizens to promote local entrepreneurship and ensure that the benefits directly support South African communities. This approach aims to empower South African entrepreneurs, promote economic inclusion, and address historical inequalities.
In a media briefing, Minister Parks Tau highlighted the government’s direct investment in the foundational levels of the economy through the launch of the R500 million fund. He stated that this initiative is expected to significantly reshape the spaza shop sector.
How Much Can Businesses Get from the Fund?
The fund offers a combination of grants and interest-free loans, with funding of up to R300 000 per shop. The breakdown is as follows:
- Stock Grant: Up to R40 000 for the initial purchase of stock via delivery channel partners.
- Assets and Infrastructure: Up to R50 000 for upgrading building infrastructure, systems (refrigeration, shelving, security, etc.).
- Blended Funding: For loans above R40 000, shops receive a blend of 50% grant and 50% as loan for.
- Non-Financial Support: Up to R10 000 for business management training and other support services.
How to Apply for the Spaza Shop Fund?
To apply for the fund, shop owners can follow the step-by-step instructions on the website. Here’s a breakdown of what you have to do:
- Go to www.spazashopfund.co.za.
- In the top menu, select How to Apply.
- Click on Apply, then once you’re on the login page, click Create an account and start creating your account.
- Enter all the necessary details required to register, ensure you read and accept the Terms and Conditions, then click Submit.
- Go through the step-by-step guide video on the website for a clear explanation of the application.
For assistance, applicants can contact the Spaza Shop Support Fund Call Centre at 011 305 8080 or via e-mail at spazafund@nefcorp.co.za. NEF Call Centre: 0861 843633; SEFA Call Centre: 012 748 9600 or helpline@sefa.org.za.
Enhance Your Spaza Shop Business
The R500 million Spaza Shop Fund is more than a cash injection into the informal sector, it’s an opportunity for Spaza shops to make a real difference with their share, provided that they get approved for funding.
Whether you’re looking to restock, renovate, or reposition your spaza shop for long-term growth, this is the time to step up. But remember, funding alone won’t future-proof your business.
You also need structure, strategy, and you need to be ready to play in the formal market. That means getting compliant, investing in systems, and building supplier relationships that go beyond the basics.
