The Small Business Development Portfolio Committee reported on Friday that 57 million Rands from the spaza shop support fund reached the intended recipients. According to data from the Department of Small Business Development, 930 payments were made as of July 31, 2026.
The Department assured the committee that none of the payments were made to a spaza shop owned by a foreign national. Committee Chairperson Masefako Dikgale highly praised the strict internal controls and due diligence measures implemented by the department and the Small Enterprise Development Finance Agency (SEDFA).
Dikgale emphasized that the money was directed to qualified South African citizens managing legitimate spaza shop businesses. She noted that the committee had engaged with the department and agency regarding allegations that the fund might have been paid to shops managed by foreigners through South African shell companies. She was guaranteed that applications undergo rigorous vetting before funds are disbursed.
The Chairperson added that her engagement with the department and agency occurred after the Protector of Public Oversight's announcement on July 17, 2026. As part of this announcement, her office sent a notification under section 7(9) to the cities of Johannesburg, Ekurhuleni, and Tshwane.
This notification arose from a systemic investigation into food safety compliance and control in spaza shops and other informal food service establishments in Gauteng. The investigation uncovered confirmed instances of the use of shell companies, beneficiary discrepancies, fraud, and misrepresentation of information, including situations where South African citizens registered as license owners or beneficiaries while foreigners managed the business.
These findings formed the basis for public complaints about potential fund disbursements to shops managed by foreigners. The Committee took these allegations very seriously, as the fund is intended to support qualified enterprises owned and operated by South African citizens.
The Department informed the committee that its internal due diligence procedures successfully identified and flagged operator discrepancies and other fraudulent applications before payment was made. Consequently, according to Dikgale, no financial payments were made concerning the fraudulent applications identified during the verification process.
Dikgale stated that the committee will continue to exercise parliamentary oversight to ensure the fund achieves its intended goals. She stressed that every Rand designated for qualified South African entrepreneurs will be protected and accounted for, ensuring support reaches genuine beneficiaries and not fraudulent structures. The Committee will remain vigilant against any attempts to circumvent rules or defraud the state.
The Committee calls on the public and small business stakeholders to report suspected fraud, the use of shell companies, or misrepresentation of information through the appropriate channels. It also urges all beneficiaries and applicants to fully comply with the Fund's requirements and provide truthful information during application and verification processes.