Spaza owners battle to get help
• Consultants tell of struggle in accessing financial aid
The government’s R175m scheme to support spaza shops and general dealers hit hard by the Covid-19 lockdown has failed many business owners, leaving some of them stranded. The government support scheme offers up to R7,000 per business in the form of a card to buy stock from designated stores.
The government s R175m scheme to support spaza shops and general dealers hit hard by the Covid-19 lockdown has failed many business owners, leaving some of them stranded.
Spaza shops are a key part of the township economy and are responsible for about 300,000 jobs. They contribute about R9bn to GDP annually and play a role in ensuring food security.
Along with many businesses in SA, spaza shops and general dealers were severely affected when the country entered the initial phase of the lockdown late in March that restricted trade and movement.
The government subsequently introduced the support scheme that offers up to R7,000 per business, but not in cash. Instead, a card is issued enabling spaza shop owners to buy stock from designated stores.
In April this year, the department of small business development announced it was partnering with Nedbank to issue procurement cards to store owners as part of the support scheme.
Nedbank said at the time it would assist owners to register for the support scheme and to complete the application form. The process of getting the new card to the store owners was intended to be quick and easy, with the bank and department aiming for a turnaround time of five days.
Nedbank also said it was keen to get involved in the initiative because small businesses are at the heart of the
South African economy, and to play a role in facilitating their trade is critical.”
‘ FINANCIAL DRIP FEEDING ’
But, according to management consulting firm Strategic Execution Advisers, many spaza shop owners were unable to access the government scheme. Financial drip feeding is perhaps the best way to describe the Covid financial aid schemes we have had so far,” Sanele Gaqa, executive chair of Strategic Execution Advisers, and CEO Jenny Cargill, wrote in a joint opinion piece. If government and business, working together, cannot get a small but important programme working well, with urgency, then what are the prospects of implementation of the many, much larger recovery pro
grammes? It is this question that is now dominating the economic discourse,” they said.
The associations representing spaza shops and informal traders could not be reached for comment on Thursday.
Gaqa worked with some Khayelitsha-based businesses between June and September to try to access financial support for spaza shops. He started with three spaza shop owners who met the criteria: they were South African, had a valid ID and a trading permit (for Cape Town, a certificate of acceptability).
Gaqa detailed the frustrating experience the traders went through: I call the Small Enterprise Finance Agency (Sefa) Cape Town office, which knows nothing about the spaza shop scheme. Go to your website,’ I say. The Sefa assistant undertakes to look into the matter and respond, which she does, and points me in the direction of Nedbank,” Gaqa said.
He then went to the branch and was given a one-page application form, which the three businesses completed. They attach the relevant documentation. I try to hand in the forms on their behalf at my personal Hout Bay branch of
Nedbank. I m told that the traders must do so personally at Nedbank s Khayelitsha branch fair enough.
One spaza shop owner starts the process. She queues at the bank for three-and-a-half hours, only to be told as she reaches the front desk that the person responsible is not at work that day. She s told to come back.”
Gaqa said he intervened by writing a complaint to the Hout Bay branch manager, who in turn contacted the Khayelitsha manager. The spaza shop owner was then asked to return. Three weeks pass. No word.
I follow up. Nedbank tells me that they have done their bit they have sent the application to Sefa for approval and refer me to Sefa. Just as you might expect, the Sefa call centre refers me back to Nedbank.”
Efforts to get in touch with Nedbank on the issue were not successful. Gaqa said he tried to contact the Sefa CEO, but the e-mail address provided on the website bounced back. Eventually I track down the acting CEO, Setlakalane Molepo, who refers me to the manager of the programme, Letlatsa Lehana. I m told there is a backlog and no applications have been processed since May. Two months later, in mid-September, I follow up and get the good and bad news: one is approved and two rejected on the basis of their municipal permit being invalid ’.
Yet all three submitted the same permit. None receive the promised SMS notifications.”
He said the three applications he worked on were the easy ones, as they had valid documentation. A few traders did not have trading permits, and so the City of Cape Town had to be brought into the loop.
The response was quick, but the outcome was not always favourable. A few were required to first make alterations to their shops to comply; an impossibility given their lockdowninduced cash crunch, said Gaqa.