Officials worry SA's spaza shop fund will fall prey to ‘sticky fingers'
Ramautswa said the spaza shop fund has the potential to stabilise the hard-hit informal industry. However, the associated also expressed concern that aid may be misappropriated due to 'sticky fingers.' And the launch of the fund has also seen 'vultures circling.'
'Ultimately, it depends on how effectively and transparently the funds are managed. Our primary concern lies in the management and accountability of the spaza shop fund,' confirmed Ramautswa.
Moreover, the Department of Small Business Development (DSBD) has warned of copycat fund scams. And says spaza shop owners should be cautious of individuals/organisations claiming to assist with the application process. Furthermore, the DSBD confirmed that no official may handle the administrative payment process. Applicants for the new spaza shop fund had to lead through a series a administrative requirements to be eligible with local government. Image: File
Likewise, the DSBD outlined several measures it will take to ensure the R500-million spaza shop fund isn't looted. The goal herein is to ensure the funds reach the intended beneficiaries in the form of business assets, rather than cash, it said: Primary, it will deal in stock (up to R40 000 worth) rather than cash.
worth) rather than cash. Stock can only be claimed by beneficiaries at wholesalers identified by major retailers.
Municipalities and township associations at ward level will also be stakeholders in the fund administration.
A trackable point-of-sale (POS) system will observe trading activity and prevent beneficiaries from selling stock illegally.
Meanwhile, the informal trading industry is valued at nearly R200 billion in South Africa. And the new spaza shop fund will be able to make the following available to eligible clients: Financial support, training, and business development services.
Up to R300 000 per shop through a combination of grants and low-interest loans.
per shop through a combination of grants and low-interest loans. Training in hygiene and regulatory standards.
Promotion of digital payment systems, inventory management tools, and financial literacy.
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