New fund offers grants and interest-free loans of up to R300 000 for spaza shop owners across Johannesburg’s townships.
In a groundbreaking move to revitalise the township economy, the City of Johannesburg has officially launched a R500 million Spaza Shop Support Fund, aimed at transforming informal spaza shop operations into compliant, sustainable businesses. This bold initiative is more than a financial boost—it’s a long-term investment in community empowerment, entrepreneurship, and inclusive economic development.
A Lifeline for Informal Businesses
Launched in Soweto in April, the Spaza Shop Support Fund is designed to uplift township and rural entrepreneurs by offering a blend of grants and interest-free loans of up to R300 000 per business. With thousands of spaza shops operating in Johannesburg’s townships, this fund could change the economic landscape by injecting both capital and structure into the informal retail space.
Since May 26, city officials have been rolling out roadshows across all seven regions of Johannesburg, actively guiding spaza shop owners on how to apply, become compliant, and access support services. From Roodepoort to Orange Farm, these sessions aim to bridge the knowledge gap and make the funding more accessible.
What’s On Offer?
Spaza shop owners who qualify can benefit from:
- Grants and interest-free loans of up to R300 000
- Mentorship and training
- Regulatory guidance
- Help with acquiring food safety and fire compliance certificates
- Assistance with permit and business registration
These benefits are structured to help informal retailers transition into the formal economy, improving their operational sustainability while contributing to job creation and local economic growth.
Compliance Challenges and Fraud Crackdown
While the opportunity is enormous, the rollout has not been without challenges. According to Benji Seitlhamo, Acting Director of Economic Development, many applicants are struggling to meet the core regulatory requirements for a spaza shop permit. These include:
- Approved building plans from Development Planning
- Fire safety certificate from EMS/Fire Department
- Health certificate from Environmental Health
In Region C (Roodepoort) alone, only 29 out of 409 applications met both fire and health compliance. Others had only partial compliance, highlighting a widespread issue in documentation and regulatory understanding.
Additionally, the city uncovered attempts at fraudulent applications, with South African citizens allegedly fronting for undocumented foreign nationals. Out of 1,125 applications, 704 were from non-South Africans, prompting closer collaboration with Home Affairs to vet documentation and refugee or asylum status.
Temporary Permits and Grace Periods
In response to these bottlenecks, the City of Johannesburg is considering the introduction of temporary permits, valid for 12 to 24 months, allowing applicants time to fully comply while still operating legally and accessing funds. This move is seen as a pragmatic balance between regulation and inclusivity.
Encouraging Uptake Through Roadshows
Despite the fund’s potential, uptake has been slower than expected. Of the 3,269 applications received to date, only 387 met the eligibility criteria. The ongoing roadshows are a critical tool to reverse this trend by educating business owners on how to correctly apply and meet compliance requirements.
The city’s approach is clear: “Support is available—but compliance is key.”
Why This Matters
Spaza shops are more than corner stores—they are essential economic pillars in underserved communities. They provide food, basic goods, and often informal credit, making them lifelines in low-income areas. Formalising and supporting these businesses contributes to:
- Local job creation
- Increased tax revenue
- Improved food safety
- More resilient township economies
Final Thoughts
The R500 million fund isn’t just a handout—it’s a strategic investment in economic justice and transformation. By supporting spaza shops through training, compliance, and capital, the City of Johannesburg is betting on the power of the informal sector to drive real change from the ground up.
If you’re a spaza shop owner, now is the time to formalise, grow, and thrive.
Location & More Information:
Roadshows are being hosted in all seven Johannesburg regions. For details on upcoming events, visit: www.joburg.org.za
Also read: How to Register Your Spaza Shop: Step-by-Step Guide
