Street vendors or informal traders are often their households’ only source of income, however, they are often forgotten in discussions around financial and other support for micro-businesses by those concerned with entrepreneur and small business development.
Some of the issues they confront daily are access to credit to replenish their stock, building their financial capabilities and resilience, business development advice and support as well as transitioning from subsistence to stable and profitable enterprises.
Spoon Money’s founder, Nicky Swartz, says, “Our mission is to support women in low-income market segments to build sustainable and profitable businesses. With our country re-emerging after nearly two months under lockdown, level 3 lockdown will see many informal traders resuming their business activities. They need support to get back on their feet and to grow their businesses in a way that will enable it to be around for many years to come.”
To build up a cash reserve is critical to the survival of small businesses, as has been highlighted by the Covid-19 crisis.
Recognising the vital role that the informal trading sector plays in communities, as well as its contribution to job creation, Spoon Money provides support to traders to grow their businesses. The initiative is based on stokvel principles, where a group of five or more women form a group to access Spoon Money’s suite of products.
Once approved, the groups start saving with Spoon Money, and are able to apply for credit to boost their businesses. This model differs from the traditional stokvel in that it invests group savings or contributions into external investment vehicles to generate returns for members. Improved cashflows make it possible to build up reserves to cover unexpected financial needs, or to improve their standards of living over the long term.
To build up a cash reserve is critical to the survival of small businesses, as has been highlighted by the Covid-19 crisis. The Spoon Money model includes a savings component where members are required to contribute a monthly minimum of R100. Says Nicky, “Business owners are encouraged to set a savings target, and work towards achieving this; contributions from each business is invested with a reputable asset manager who is able to provide access to wealth-creating capital markets. Participants are able to withdraw their savings at any time, provided their group is in good standing."
Spoon Money participant Veliswa Sikweza, a spaza shop owner in Site B, Khayelitsha, says that before she joined Spoon Money it was extremely difficult to access credit to grow her business. The Spoon team onboarded her even though she had been blacklisted. “I am grateful for Spoon Money’s belief in me and my business’s potential to grow. I now run a thriving spaza shop, and regularly share the details of my journey with other ladies who require support to take their businesses to higher heights,” she says.
Based on the principle of a group loan, where every member is responsible for its repayment, Spoon Money’s participants are able to access credit for stock replenishment. Concludes Nicky, “At the very heart of our vision is thriving township success stories which can be used as role models for others in the community to achieve greater economic mobility and success. We therefore want to make a strong appeal to female informal traders to contact us to embark on an enriching and empowering journey to take their businesses to an enterprise which benefits themselves, as well as the communities in which they operate.”
For more information, or to sign up, Spoon Money can be contacted on firstname.lastname@example.org or 078 086 8765 or visit www.spoonmoney.com.