Ten-thousand spaza shop owners are going hi-tech with cash tills that quantify stock electronically and help finance loans.
This is thanks to a R25m investment by small business fund investment hub the SA SME Fund in fintech fund manager A2Pay, the provider of technological solutions for small to medium-size business owners.
SA SME Fund CEO Ketso Gordhan said he believes the continued investment in A2Pay is likely to create 40,000 jobs over the next decade by attracting more people to open spaza shops. As a requirement of the programme, a shop owner must employ at least one person in their shop.
The fund is a private sector-led initiative born out of the CEO Initiative, a partnership between the government and CEOs to stimulate the economy and create jobs. The programme is already up and running in more than 433 spaza stores in KwaZulu-Natal, and nationally in 1,500 spaza stores.
"This is a brilliant collaboration which will have a profound impact on the lives of small business owners in SA," Gordhan said at a media event in KwaMashu, north of Durban, this week.
The tills do more than just scan barcoded items. They can be used to sell airtime, bus tickets and electricity, eliminating the need for rural residents to travel to centres offering such services.
"We have quick buttons so you can capture non-barcode items like hot food, chips, loose cigarettes and little sweets. We also loaded 15,000 barcoded items into the system," said Jon Harris, A2Pay's head of commercial.
The system "also works out your cost price and gross profits and tells you your top-selling items by quantity, by profit and by value. It gives you weekly and monthly stock and turnover reports, including gross profit reports," said Harris.
Jabulile Dubazane, who has owned a spaza shop in Avoca Hills, north of Durban, for 13 years, said the A2pay programme has helped her grow her business and keep track of the money coming in.
"I never used to take notice of my money. I would ask whoever to look after the store for me and they would end up stealing and I wouldn't even notice. Now I can keep track and see who is stealing from me," said Dubazane.
In 2018, Dubazane borrowed R16,000 from A2Pay to buy stock and has since repaid the loan. She recently borrowed R40,000, which she said she will be able to repay in no time.
"I am not afraid of debt. I know I will be able to pay it back because I now understand my budget and how it all works," she said.
Once she has paid off the loan, Dubazane has her eyes set on another loan to help her open a small supermarket she will leave to her grandchildren. "I always tell my grandchildren how important it is to work for yourself. I tell them this shop will be their inheritance one day, so even if they don't have anything at least they will have this shop to help them live," said Dubazane.
A2Pay's biggest value proposition for spaza owners is access to capital. "A2Pay has given us access to capital," said Philani Masinga of the North Region Business Association, which looks after the interests of small businesses in KwaZulu-Natal. "As small business owners we cannot get a loan from the bank. They ask for financial statements but do not recognise the ones we write by hand."
Spaza shop owners are able to load money directly onto the machines via bank deposits. From that, A2Pay deducts repayments from the shop owners until their debt is repaid. A2Pay COO Tina Mason said they have a 100% loan repayment rate.
She said the business training they offer resulted in a 25%-30% sustained increase in revenues. "When you put a merchant or an owner of a shop who is willing ... together with technology and you give some training and then you give access to capital, all things can become possible," said Mason.
