Latest news with #KgothatsoRamautswa
The South African
3 days ago
- Business
- The South African
Why 85% of applicants don't comply with SPAZA shop fund
Four months since its launch, the R500-million spaza shop fund has failed to reach initial expectations. The Department of Trade, Industry and Competition revealed recently that the spaza shop fund has attracted more than 10 000 applications. However, a worryingly low amount of spaza shop fund applications have meant compliance requirements. As such, applications have had to be split into two categories. The first group, made up of 14% who comply. And a second group of the remaining 86%, 'who do not yet meet requirements' but will be assisted. Experts say if you include South Africa's informal sector, the country's unemployment rate is actually closer to 10%, and not 33% as reported by Stats SA. Image: File A group representing the informal traders says government's 'rigid compliance criteria' is to blame for the low uptake, reports Daily Maverick . The fund is the brainchild of the Minister of Small Business Development, Stella Ndabeni-Abrahams. And it came about following the 2024 poisoning of several young children. However, the South African Spaza Shops Association's Kgothatso Ramautswa, says it is 'deeply concerned' by the lack of compliance: 'This is not a reflection of spaza shop owners, but rather a failure of government to design a realistic funding support system. The fund is failing its intended beneficiaries. If 86% are non-compliant, the problem lies in the system, not the people,' Ramautswa says. South Africa's tax-free informal sector is worth billions, say economists. And the fund is a way to 'get them on the books.' Image: File However, in the face of such low compliance, the department says it will provide non-financial support. This will include assistance in applying for the necessary documentation through their local municipality for spaza shop fund applicants. The current maximum funding available per spaza shop fund is R100 000. And this is offered as a blended finance instrument, with a 50% grant and 50% interest-free loan. The debt portion of which is repayable with zero interest. As a reminder, the government's R100 000 per qualifying owner is made up like so. R40 000 for stock purchases, R10 000 for business training and R50 000 for infrastructure upgrades. As such, the package is designed to promote sustainability, competitiveness and regulatory compliance versus larger retailers. As of now, no spaza shop fund applications have actually been denied. However, in future they could be for the following non-compliance: Applicant is not a South African citizen. If the applicant is misrepresenting ownership or control of the business. Any fraudulent or misrepresentation documents in the application. Invalid or non-existent trading permit or a business licence. Use of funding for personal or non-business-related purposes. Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1. Subscribe to The South African website's newsletters and follow us on WhatsApp, Facebook, X and Bluesky for the latest news.
The South African
24-05-2025
- Business
- The South African
Officials worry SA's spaza shop fund will fall prey to ‘sticky fingers'
There is widespread concern the R500-million SA spaza shop fund will be misappropriated if it is not well managed from the start. This is the view of the President of the South African Spaza and Tuckshop Association (SASTA), Kgothatso Ramautswa. 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. Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1. Subscribe to The South African website's newsletters and follow us on WhatsApp, Facebook, X and Bluesky for the latest news.
