South Africa Unveils Program to Assist Small Businesses

(3 Minutes Read)

• The Motor Spares Collective is an initiative designed to unlock the potential of small township businesses in South Africa. It drives the growth and creates jobs in areas where unemployment and poverty are high.

South Africa’s right to repair laws allow car owners to use independent mechanics without losing their warranty. But with no access to parts, township mechanics were still at a disadvantage. That seems to be over.

The Motor Spares Collective is an initiative designed to unlock the potential of small township businesses in South Africa. It drives the growth and creates jobs in areas where unemployment and poverty are high.

The Motor Spares Collective allows them to have combined purchasing power and place orders online. For US$10 a month, it helps the owner of a small business, say a repair shop, to place his orders online, saving hours of being in long queues.  The online orders are placed with a spares shop through WhatsApp, with authentic parts delivered within 24 hours. This helps them to compete with large service centres.

Beyond spare parts, the collective offers skills development and help with business registration and financing. It’s also planning to expand by adding life insurance and other social safety net services for its members.

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South Africa has over 700,000 registered small businesses. In the townships, small businesses include hair salons, taverns, car repair shops, laundromats, and others, sometimes operating out of people’s homes. According to a report by financial services group Lesaka, South Africa’s informal business sector generates an estimated US$33 billion in revenue, or more than 6 percent of GDP.