15 October 2025 | 12:15 CAT
3-minute read

Standard Bank has published its first-ever Township Informal Economy Report, revealing that nearly 80% of businesses in townships go unregistered, excluding them from formal support, finance, and market opportunities. The findings underscore the vast scale and economic weight of the township informal sector—while exposing systemic hurdles that prevent these enterprises from contributing fully to the national economy.

Lesiba Matladi, Senior Manager for Enterprise and Supplier Development at Standard Bank, explained that the research surveyed about 250 township businesses and found that together, they create over 45 000 jobs, pointing to how vital the informal sector is for livelihoods, even though most of those businesses are unregistered and thus invisible in formal economic metrics.

He stressed that many township businesses still operate largely with cash and minimal use of digital platforms, saying that entrepreneurs are seeking “affordable platforms that speak to me as a business, that my consumers will actually use.”

Matladi also described how business owners want more than just funding; they want support and guidance into markets beyond their local township, better business development, and clear assistance with formalisation.

Matladi noted that one of the biggest hurdles is lack of knowledge: many don’t know, for example, when registration triggers tax obligations, or that small incomes are exempt.

Several background data points help frame Matladi’s commentary: the informal township economy, though largely unregistered, is estimated to be worth nearly R900 billion annually and accounts for about 19,5% of total employment in South Africa.

Other findings from the report include that almost half of township businesses run from homes or garages while only about 11% occupy formal commercial premises; access to bank loans is very limited; and that digital payments are growing, but cash remains dominant.

Matladi said that Standard Bank is responding with practical measures: making registration through channels like BizConnect easier, offering business registration support via text, hosting financial literacy training and SME summits, and educating entrepreneurs on regulations including food safety and tax compliance.

The report and its recommendations suggest that unlocking the full potential of township enterprises will require coordinated efforts from government, financial institutions and civil society—improving infrastructure, simplifying formalisation, and providing tools and services tuned to the realities of township business life.

If properly acted upon, these changes could help move many township businesses from mere survival towards scaling sustainably, thereby broadening formal economic inclusion and boosting growth.

Listen to the full interview on Sabaahul Muslim with Moulana Sulaimaan Ravat.