Progress report on Spaza Shop Support Fund; with Acting Minister

Video The Committee met virtually with the Department of Small Business Development (DSBD) and the Small Enterprise Development and Finance Agency (SEDFA) to receive an update on the R500 million Spaza Shop Support Fund. The progress report indicated that three delivery channel partners had been assigned to various provinces, with R52 million disbursed to initiate the processing and distribution of applications. A total of 2 867 applications had been received, primarily from Gauteng, with a nearly equal number of requests for stock and infrastructure. 294 applications had been successfully processed and were awaiting allocation to the National Empowerment Fund and SEDFA. Members expressed concern that given the high unemployment rate in the country, the 294 applications processed so far were just a small fraction of what was needed. With approximately 8 251 individuals having registered their names, the interactions with the system demonstrated strong interest from South Africans in the programme. Members suggested that more needed to be done to improve access for applications, especially for spaza shop owners located in rural areas. The SEDFA footprints around the country were scrutinised and criticised for being inaccessible. Members proposed the use of mobile offices and increased road shows to raise public awareness to attract more South African-owned shops to the programme. They highlighted this issue after learning that only about 6% of spaza shops were owned by South Africans, while over 70% were owned or operated by foreign nationals. Unfortunately, foreign nationals could not register their businesses without the assistance of South Africans. The Department told Members it would be undertaking the second phase of the road shows until 6 June. When Members questioned the closing date for applications, they were told that it had been kept open to gather and analyse the data to determine the trajectory and plan for public awareness and support. To eliminate the challenges experienced with the previous programme, spaza shop owners would be trained on how to use the system so that they could order their stock through the system, which would enable the Department/SEDFA to monitor the process and to encourage continuity. It was therefore critical to get the analysis and storage of data right. Members felt the absence of the Departments of Home Affairs and Trade, Industry and Competition, limited the responses, because central to this Fund was the issue of the 70% foreign-owned spaza shops and accessibility to the Fund. They requested the road show schedule for the different districts and provinces, and also placed emphasis on reaching businesses owned by marginalised persons.