South Africa’s township economy represents one of the country’s largest untapped opportunities. Kasipreneurship, a term for township-based enterprises ranging from spaza shops and hair salons to stokvels and room rentals, contributes significantly to employment and economic activity, yet remains largely excluded from the formal economy.
The result is that many small business owners operate outside recognised financial systems, limiting access to funding and exposing them to exploitative lending practices. This exclusion is not only an economic issue but also a structural barrier to growth and development.
Education and financial access
Around half of informal business owners do not have a matric, according to Statistics South Africa. This lack of financial education leaves many vulnerable to loan sharks, trapping entrepreneurs in cycles of debt. Financial inclusion, therefore, goes beyond access to bank accounts, it requires safe, affordable alternatives that allow businesses to borrow and grow sustainably.
The scale of the hidden economy
Research by informal economy expert GG Alcock estimates that township businesses generate around R750bn in transactions each year. Despite this scale, most activity is invisible to the South African Revenue Service and excluded from formal economic data. In 2023, 1.9m South Africans ran non-VAT registered businesses, a figure likely understated.
The digital shift
The South African Reserve Bank aims to establish a fully digital payment ecosystem by 2030. For kasi businesses, digital integration, including debit and credit solutions, point-of-sale machines and debit order options, can reduce cash dependence, improve security, and bring more participants into the formal financial system.
Digital tools also create indirect benefits: customers who adopt electronic payments are more likely to use bank accounts for salaries, reducing risk and unlocking access to broader financial services.
Ground-level solutions
Effective solutions depend on understanding what businesses and customers in townships need. Research conducted by community-based teams highlights that digital-first payment systems are the way forward. But inclusion must extend beyond card acceptance in select outlets; it requires full integration of payments, credit, and financial services.
The path forward
Formal recognition and support of Kasipreneurship is critical. Bringing millions of township enterprises into the formal economy would boost tax collection, unlock growth, and reduce inequality. For policymakers, banks and fintechs, the task is to build financial bridges that allow kasi businesses to thrive within South Africa’s evolving payment ecosystem.
