by AKANI CHAUKE
JOHANNESBURG, (CAJ News) – NEARLY 80% of township businesses in South Africa operate without formal registration, limiting their access to finance, markets, and digital infrastructure.
This is the key finding from Standard Bank’s inaugural Township Informal Economy Report, released this week.
The study provides a comprehensive view of South Africa’s vibrant but under-supported informal sector. Despite contributing nearly 19.5% of the country’s total employment in Q4 2024 and an estimated R1 trillion to the economy, most township businesses remain outside the formal economy, according to Standard Bank and Statistics South Africa.
Conducted across Gauteng, KwaZulu-Natal, Western Cape, Limpopo and North West, the report surveyed businesses with annual turnovers ranging from R100,000 to R50 million. The findings highlight systemic challenges: fewer than 9% of businesses have access to bank loans, while the majority rely on personal savings or family support.
“With the right partnerships, township SMEs can move from survival to scale,” said Simone Cooper, Head of Business & Commercial Banking at Standard Bank. “This report shows the structural challenges they face and the critical need for funding, market access, and digital enablement.”
Despite obstacles, the report notes that more than 56% of businesses prefer digital payments like EFTs, signaling a readiness for safer, cashless transactions. However, 49% still operate from homes or garages, with only 11% in formal commercial spaces.
Standard Bank aims to tailor its SME offerings based on these insights. Tools like MyMoBiz and SimplyBlu provide township entrepreneurs with entry-level banking and merchant solutions to support growth and formalisation.
“This is about being closer to our clients and supporting them throughout their business journey,” added Naledzani Mosomane, Head of Enterprise and Supplier Development at Standard Bank.
– CAJ News