What officials discovered about the R500m Spaza Fund before disbursement

The Department of Small Business Development has uncovered discrepancies in applications for the R500 million Spaza Shop Support Fund before any money was disbursed. Deputy Director-General Qiniso Delwa revealed that SEDFA identified instances where the applicant, licence holder, and operator of the spaza shop did not align. Delwa mentioned that the department found cases where businesses could not be located at the provided addresses or were not operating as spaza shops.

These discrepancies were detected during the verification process, and all non-compliant applications were promptly declined. Delwa informed the Portfolio Committee on Small Business Development that 16 such cases were reported in March. The department has also agreed to submit records of suspected business fronting to the BBBEE Commission for further scrutiny.

SEDFA has approved 1,386 applications worth R83.9 million, disbursing R57 million to 930 spaza shop owners as of 31 July. However, licensing delays persist, with approximately 38% of applicants lacking valid business licenses or temporary permits.