The Portfolio Committee on Small Business Development welcomes the stringent internal controls and due diligence measures implemented by the Department of Small Business Development and the Small Enterprise Development Finance Agency (SEDFA) to ensure that the Spaza Shop Support Fund reaches its intended beneficiaries: qualifying South African citizens operating legitimate spaza shop businesses.
This follows the committee’s engagement with the department and SEDFA on 12 August 2026 about the allegations that the Spaza Shop Support Fund had been disbursed to spaza shops operated by foreign nationals through South African fronts.
The committee Chairperson, Ms Masefako Dikgale, said the committee was encouraged by the assurance that applications are subjected to stringent verification processes before any funds are disbursed.
She said: “The committee welcomes the robust internal controls put in place by the department and SEDFA to protect public funds and ensure that the Spaza Shop Support Fund benefits the South Africans it was established to support. Where an application reveals an operator mismatch or other indicators of fraud, that application must not proceed to disbursement.”
The committee’s engagement with department and SEDFA follows the Public Protector’s announcement on 17 July 2026 that her office had issued a Section 7(9) notice from a systemic investigation into food-safety regulation and enforcement at spaza shops and other informal food businesses in Gauteng.
The investigation identified verified cases of business fronting, beneficiary mismatches, fraud and misrepresentation, including instances where South Africans were registered as licence holders or beneficiaries while foreign nationals operated the businesses. These findings formed the basis for allegations by members of the public that some funding from the Spaza Shop Support Fund may have reached spaza shops operated by foreign nationals.
Ms Dikgale said the committee regarded the allegations seriously, particularly because the fund is intended to support qualifying South African-owned and operated businesses.
The department informed the committee that its internal due diligence processes had successfully identified and flagged operator mismatches and other fraudulent applications before payment. As a result, no financial disbursements were made in respect of the fraudulent applications identified through the verification process.
According to the department, as at 31 July 2026, a total of 930 disbursements had been made, amounting to approximately R57 million. The department further assured the committee that no single disbursement had been made to a spaza shop owned by a foreign national.
The committee commends the department and SEDFA for strengthening verification mechanisms and expects these controls to remain firmly in place throughout the implementation of the Fund. Ms Dikgale said the committee would continue exercising parliamentary oversight to ensure that the fund achieves its intended objectives.
“We will continue to exercise oversight over the department and SEDFA to ensure that every rand intended for qualifying South African entrepreneurs is protected and accounted for. Support must reach genuine beneficiaries, not fraudulent fronts. The committee will remain vigilant against any attempt to circumvent the rules or defraud the state,” she said.
The committee encourages members of the public and small-business stakeholders to report suspected fraud, fronting or misrepresentation through the appropriate channels. It further calls on all beneficiaries and applicants to comply fully with the Fund’s requirements and to provide truthful information during the application and verification processes.
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