The Department of Small Business Development has formalised more than 2,200 spaza shops around the country since the COVID-19 pandemic began, Minister Khumbudzo Ntshavheni has said.
During a question-and-answer session with Parliament on Tuesday, Ntshavheni said these micro enterprises would now be able to build their credit profiles and access loans from financial institutions.
She added, “We were able to formalise 2,242 spaza shops and are processing applications from 4,406 spaza shops. We are already processing applications from 31 small-scale and informal bakeries, some of which are run by cooperatives.
“We have 33 applications from motor mechanics and panel beaters, and also from 15 enterprises that are making clothing and garments for our people.”
‘New economy’
Ntshavheni’s revelation follows Finance Minister Tito Mboweni’s comments in April about a “new economy” the government intends to build after the pandemic.
“Every spaza shop must be registered with a licence to operate and more importantly, must have a bank account, a tax number, and must open the business for inspection by the Department of Health so that our people are not going to be fed expired goods,” he said at the time.
Ntshavheni said many micro enterprises that approached the government for relief had been operating informally. The government will now be able to support these businesses over the next 12 to 24 months, she added.
The Minister said, “We are supporting these small enterprises to formalise and we will stay with them for the next 24 months because we want them to build a credit profile and run profitable businesses.
“We have also partnered with the banks to make sure they can create products that are suitable and less costly to the small and informal businesses.”
In late May, the department announced a second wave of relief for informal, micro and small businesses, especially those based in townships and rural areas.
The intervention specifically targeted small-scale bakeries and confectionaries, clothing and textile businesses, and the automotive sector.
The department also has partnerships with the Small Enterprise Finance Agency (SEFA), Standard Bank and Nedbank on its Spaza Support Scheme.