The R500 million Spaza Shop Support Fund is facing renewed scrutiny over slow disbursements and concerns about the state’s ability to properly verify businesses applying for financial support.
Speaking to VOC News, analyst Sandile Swana says only R83.9 million in applications had been approved, with R57 million actually disbursed to about 930 spaza shop owners.
Swana says the figures raise questions about the implementation of the fund, particularly given the large number of spaza shops operating across the country.
“The state is unable to verify these spaza shops. When we are in the township, you can clearly walk to the spaza shop. You don’t get confused to see where the spaza shop is,” he said.
He says discrepancies identified during the verification process point to weaknesses in basic administration. These include cases where the applicant, licence holder and person operating the business did not match, as well as businesses that could not be found at the addresses provided.
“The problem comes from the fact that you have a state that is not capable. Basic administration has actually defeated the state to actually run this,” Swana said.
The Department of Small Business Development says applications flagged during verification were rejected before any funds were paid out. Suspected fronting cases have also been referred to the BBBEE Commission.
Swana says concerns over capacity extend beyond the fund, arguing that government needs stronger systems and skilled personnel to support small businesses.
“We need to ask whether we have the correct professionals, whether they are in the right locations and whether we have enough of them,” he said.
He warns that without stronger oversight, the remaining funds could either remain undistributed or risk being paid to the wrong beneficiaries.
Photo: Pixabay
