Spaza Shop Support Fund: Empowering Township Businesses in Dikgatlong Local Municipality -

Discover how small business owners in Dikgatlong Municipality can access up to R100,000 in funding through the Spaza Shop Support Fund. Learn about eligibility, benefits, and how this initiative is reshaping local economies in South Africa.

Spaza Shop Support Fund: A Lifeline for Small Businesses in Dikgatlong Municipality

In a bold move to empower township and rural businesses, the South African government—through the Department of Small Business Development (DSBD) and the Department of Trade, Industry and Competition (the dtic) has launched the Spaza Shop Support Fund. This initiative offers grants of up to R100,000 to help small-scale spaza shop owners grow and formalize their businesses. It is already making a significant impact in regions like Dikgatlong Municipality, especially in areas such as Barkly West, where economic challenges are especially severe.

Spaza shops play a crucial role in South Africa’s informal economy. They are often family-run businesses that provide essential goods to communities underserved by large retail chains. By offering targeted support to these businesses, the government aims to foster economic inclusivity and reduce poverty in vulnerable regions.

What is the Spaza Shop Support Fund?

The Spaza Shop Support Fund is a government-backed financial aid program designed to uplift informal township retailers. Administered by the National Empowerment Fund (NEF), it provides not only funding but also technical and strategic support to ensure long-term sustainability.

The fund combines direct financial support with business development tools such as training, mentorship, and compliance assistance. The objective is to transition informal retailers into fully registered and compliant small enterprises that contribute to the formal economy.

This fund emerged in response to the COVID-19 pandemic’s economic fallout, which disproportionately affected informal traders. However, the program has since evolved into a broader economic intervention aimed at strengthening local economies and creating jobs.

Why Dikgatlong Municipality?

Located in the Northern Cape province, Dikgatlong Municipality faces high unemployment and limited economic infrastructure. Many residents rely on informal businesses, including spaza shops, as their primary source of income.

The government has prioritized this region due to its urgent need for economic stimulation. Barkly West, the largest town in Dikgatlong, has seen increased engagement with the program. Local officials have organized community outreach and information sessions to encourage participation.

These efforts are part of a larger government strategy to drive inclusive development through targeted local investment.

Breakdown of the R100,000 Grant

The grant consists of:

R40,000 for inventory and stock purchases
R50,000 for infrastructure upgrades (e.g., renovations, fridges, shelves, signage)
R10,000 allocated to business development services, including training and mentorship

This distribution ensures that both the operational and growth aspects of the business are addressed. The infrastructure support component is particularly important in rural areas where retail spaces are often under-equipped.

Beneficiaries are required to submit a proposal outlining how the funds will be used. The proposal must reflect realistic and impactful plans that align with the grant’s objectives.

Eligibility Criteria

To be eligible, applicants must:

Be South African citizens over the age of 18
Own or operate a spaza shop in a township or rural area
Provide proof of operation, including photos, receipts, or a lease agreement
Submit a valid ID and proof of residence
Be willing to participate in compulsory training programs
Ideally register with the CIPC, SARS, and UIF (though assistance is provided if not already done)

This structured approach ensures that funds go to deserving and serious entrepreneurs who are committed to growth.

Application Process in Dikgatlong

In Dikgatlong Municipality, the NEF has teamed up with municipal authorities to streamline the application process. Community halls and schools, such as Vaalrivier Hoërskool, have been used as venues for workshops. During these sessions, officials assist entrepreneurs with documentation, explain the fund’s objectives, and help applicants avoid common mistakes.

Applicants are advised to prepare the following in advance:

A short business plan
Photographs of their shop
A breakdown of how the grant will be utilized
Any existing financial records (however basic)

These sessions have increased awareness, but uptake remains a challenge due to literacy levels and limited internet access in some parts.

Challenges in Application Uptake

Despite strong interest, only 9 of 69 applications submitted from the Northern Cape were successfully verified by June 2025. The main reasons include:

Incomplete documentation
Lack of compliance with registration requirements
Misunderstanding of the fund’s conditions

To mitigate this, local municipalities have committed to additional support, including door-to-door outreach and multilingual application guides.

Community Impact and Local Leadership

Local leaders, including Acting Mayor Kenny Jacobs, have voiced strong support for the initiative. During a recent address, Jacobs emphasized the importance of collaboration among spaza shop owners:

“We encourage bulk purchasing through cooperatives. By working together, shop owners can reduce costs and compete with larger retailers.”

He also pointed to the broader vision: economic self-reliance and dignity through entrepreneurship. The mayor’s office continues to work closely with the DSBD and NEF to ensure resources reach their intended recipients.

Success Stories: Precious Molatlhiwa

One of the early success stories is Precious Molatlhiwa, a young entrepreneur from Barkly West. She received the grant in late 2023 and transformed her modest tuck shop into a thriving mini-market.

She added refrigeration units for perishables
Installed new shelving and branding materials
Partnered with other shop owners for bulk purchases
Created two part-time jobs for local youth

Within six months, her revenue grew by over 80%, and she has since registered her business with CIPC.

Post-Funding Responsibilities

Grant recipients must:

Attend follow-up training and mentoring sessions
Submit quarterly progress reports
Maintain compliance with SARS and UIF regulations
Use the funds strictly for approved business improvements

Failure to comply can result in penalties, including being required to repay the grant or being blacklisted from future opportunities.

How to Apply

Applications can be made through:

NEF community outreach events
Local municipal economic development offices
The official NEF website: https://www.nefcorp.co.za

Broader Economic Vision

The Spaza Shop Support Fund aligns with broader efforts to promote entrepreneurship as a tool for social change. By funding township businesses, the government helps:

Stimulate local economies
Create grassroots employment
Reduce reliance on social grants
Promote financial literacy and formalization

This is a long-term investment in South Africa’s economic future, particularly in underserved areas like Dikgatlong.

For more detailed information on national small business strategies, visit the Department of Small Business Development’s official page:
https://www.dsbd.gov.za