Business
R760 million flows into township and rural startups as funding shifts
A quiet funding shift is taking place
For years, conversations around small business funding in South Africa have followed a familiar line. Too much money ends up in Gauteng and the Western Cape, while township and rural entrepreneurs struggle to break through. Now, new figures suggest that the picture is starting to change.
More than R760 million has been allocated to empower township and rural startups across the country since 2015. The funding comes through government-backed innovation programmes aimed at small, micro, and medium enterprises, with a growing focus on provinces that have historically been left behind.
The update was shared by Stella Ndabeni-Abrahams, Minister of Small Business Development, in response to parliamentary questions that cut straight to the heart of the issue. Are informal and rural businesses really being reached by digital transformation initiatives?
Pressure from Parliament, answers from government
The questions were posed by Inkatha Freedom Party MP Bhekizizwe Luthuli, who asked whether government support was still skewed towards already advantaged provinces.
Ndabeni-Abrahams responded by outlining a range of interventions led by the Small Enterprise Development and Finance Agency. These include digital skills training for township entrepreneurs, targeted support for spaza shops to adopt digital payment systems, and tools to modernise stock management. The idea is simple. Help small businesses operate more efficiently and reach wider markets in an economy that is increasingly online.
Digital hubs reach beyond the big cities
A key part of this push lies in the country’s digital hubs. These hubs offer training and support in areas such as e-commerce, coding, artificial intelligence, robotics, cybersecurity, and data management. While these terms often feel far removed from informal trading, the intention is to prepare small businesses for a rapidly evolving market rather than locking them out of it.
The Digital Transformation Programme focuses on assessing how ready a business is for digital tools and then offering tailored training to help it grow. For township-based and rural entrepreneurs, this can mean the difference between surviving and scaling.
Where the money is really going
The numbers tell an important story. Of the R763 million disbursed since 2015, over R256 million has gone to township-based startups, while more than R238 million has been allocated to rural businesses. Crucially, there has been a deliberate effort to redirect funding towards poorer provinces.
Limpopo has received just over R90 million through the Small Business Innovation Fund, while Mpumalanga has received more than R95 million. Both figures are now higher than the amount allocated to the Western Cape, which received around R82 million.
This shift reflects a broader strategy of building a funding pipeline in under-resourced areas, including support for local incubators that can prepare startups for investment before they apply for funding.
Why this matters on the ground
On social media, small business owners have reacted with cautious optimism. Many welcome the intention to rebalance funding but say the real test lies in access, speed, and transparency. For township traders and rural founders, navigating applications and meeting compliance requirements remains a major hurdle.
Still, the renewed focus on digital skills and innovation funding speaks to a bigger goal. Bridging South Africa’s digital divide is not only about technology. It is about who gets the chance to compete, grow, and create jobs where they live.
As the funding map slowly redraws itself, the hope is that the country’s next wave of successful startups will not be limited to city centres. They could just as easily emerge from a spaza shop in Limpopo or a rural tech hub in Mpumalanga.
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Source: IOL
Featured Image: News24
