Parks Tau details oversight framework for R100k spaza shop support fund
The minister explained that disbursements from the Spaza Shop Support Fund are made only after formal approval by the NEF's Investment Committee.
Minister of Trade, Industry and Competition Parks Tau has provided responses to questions about the oversight mechanisms and departmental roles governing the government's R100,000 Spaza Shop Support Fund.
He revealed a comprehensive framework involving multiple agencies and automated monitoring systems.
Responding to questions from Democratic Alliance MP Anna Maria van Zyl, Tau outlined the administrative structure behind the fund's disbursement.
He clarified that his department's contribution will be channelled through the National Empowerment Fund's Rural and Township Fund programme using the 2025-26 fiscal year budget allocation.
The minister's responses shed light on the monitoring mechanisms designed to prevent fund misuse and ensure transparency in a programme that has attracted significant attention for its support of township entrepreneurs.
Spaza shop fund automated monitoring and committee oversight
Tau revealed that the NEF has put in motion multiple supervision mechanisms to monitor fund payments.
'I have been advised by the National Empowerment Fund (NEF) as follows,' Tau stated, before detailing the comprehensive framework.
He said that all applications are processed through the NEF's automated Customer Relationship Management system.
The system tracks application progress and provides real-time daily reports on fund status and approvals.
The minister further explained that disbursements only proceed following formal approval from the NEF's Investment Committee.
The committee 'evaluates each application for funding following established investment criteria and due diligence protocols that are aligned to the Spaza Shop Support Fund criteria'.
Regarding the finance verification processes, Tau revealed that the NEF's Finance Division implements internal financial controls that verify and validate all disbursements before funds are released.
'These controls ensure that disbursements are made in accordance with the approved terms and conditions of Spaza Shop Support Fund,' he clarified.
ALSO READ: Government pays R6 million from R500 million Spaza Shop Fund
Spaza shop post-investment monitoring and direct payments
Tau detailed the post-disbursement oversight measures, explaining that the NEF's Post-Investment Unit conducts reviews to confirm funds have been utilised according to approved business plans and conditions.
'This includes site visits, assessment of receipts, and verification of stock or asset purchases,' he said.
The minister explained the system of direct payments.
He said to minimise misuse risks, disbursements are made directly to vetted and pre-approved suppliers for the procurement of goods and services required by beneficiaries, rather than to the clients themselves.
The oversight framework includes monthly reporting to the NEF Executive Committee for operational monitoring, quarterly reporting to the NEF Board for strategic oversight.
It also includes weekly coordination meetings between the NEF, the Department of Small Business Development, the DTIC, and Sedfa.
ALSO READ: Spaza shops ask for more than R32m worth of stock
Cogta's supporting role clarified
The minister clarified the Department of Cooperative Governance and Traditional Affairs' role in the programme.
'Cogta is not responsible for the disbursement of funds under the Spaza Shop Support Fund,' said Tau.
He added that the spaza shops' payments are managed by his department and the Department of Small Business Development through their agencies.
According to Tau, Cogta's role focuses on municipal oversight.
Municipalities are responsible for developing and enforcing local legislation and bylaws governing spaza shop operations. This includes trading permits and business licences.
Through municipalities, Cogta assists the NEF and SEDFA by verifying that each applicant possesses a valid trading permit or business licence and complies with relevant municipal regulations and by-laws.
Tau emphasised that 'Cogta's involvement strengthens the integrity of the fund by ensuring that only compliant and duly licensed businesses benefit from the financial support.'
Tau confirmed that the NEF and SEDFA will be responsible for overseeing the Spaza Shop database.
The entities adopted a shared portal across both their systems, with regular meetings held to coordinate application processing.
ALSO READ: Government offers R500m spaza shop support fund – Here's what you need to know
Spaza shop fund context
The Spaza Shop Support Fund was established for South African spaza shop owners seeking to enhance and expand their businesses.
Those interested in boosting their businesses can now apply for financial and technical assistance through the government's fund.
Before the introduction of the fund, spaza shop registrations nationwide were introduced to prevent the sale of hazardous food to children, following multiple food poisoning incidents in 2024.
The government's Spaza Shop Support Fund offers up to R100,000 in financial and non-financial support to spaza shop owners.
The initiative is a part of its commitment to township and informal economy development.
The support package includes:
R40,000 in grant funding for stock,
R50,000 in blended grant and loan financing for shop upgrades, including fridges and shelving, and
R10,000 worth of business training and digital tools.
🟢 Spaza Shop Support Programme – Apply for Assistance Up to R100 000 🟢
The Government of South Africa, through its commitment to township and informal economy development, invites spaza shop owners to apply for financial and non-financial support of up to R100 000.
Support… pic.twitter.com/XjGxE8r90S — South African Government (@GovernmentZA) June 8, 2025
NOW READ: Over 30K spaza shop applications were from foreign nationals
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