Naledzani Mosomane, Head of Enterprise and Supplier Development (ESD) at Business & Commercial Banking South Africa, Standard Bank Group

Township Entrepreneurs Show Strength Amid Barriers, Standard Bank Report Finds

October 21, 2025October 28, 20251008 Views Standard Bank 2 min read

A new report by Standard Bank has shed light on South Africa’s vibrant yet often overlooked township informal economy, revealing both its economic power and the challenges faced by small business owners working on the margins of formality.

According to the Township Informal Economy Report, nearly 80% of township businesses remain unregistered meaning they operate without formal documentation, tax compliance or VAT registration. This limits their ability to access finance, technology and formal markets that could help them grow.

Despite these barriers, township entrepreneurs continue to play a major role in the economy. Stats SA data shows that the informal sector accounted for almost one in five jobs in the country by the end of 2024. The township economy itself is estimated to be worth close to R1 trillion, showing its enormous contribution to South Africa’s economic life.

The Standard Bank study covered businesses across Gauteng, KwaZulu-Natal, Western Cape, Limpopo and North West, with annual turnovers ranging between R100,000 and R50 million. It paints a picture of resourcefulness, competition, and untapped potential.

“This report shows the structural challenges facing township entrepreneurs and what it will take to overcome them,” said Simone Cooper, Head of Business & Commercial Banking at Standard Bank South Africa. “With the right partnerships, township SMEs can move from survival to scale.”

Some of the key insights from the report include:

Almost 80% of township businesses are unregistered.
Entrepreneurs face intense competition, with as many as 20 similar businesses operating in a single area.
Fewer than 9% of business owners have access to bank loans, relying mostly on personal savings and family support.
Although cash remains common, more than half of respondents (56%) prefer EFT or bank transfers, showing a readiness for digital payments.
Nearly half (49%) of township businesses operate from homes or garages, and only 11% use commercial premises.
Many also contribute to their communities through local sponsorships and youth initiatives.

“These insights reflect the lived realities of township entrepreneurs – their resilience, their contribution, and the barriers that hold them back,” said Naledzani Mosomane, Head of Enterprise and Supplier Development at Standard Bank. “For us, it reinforces the importance of being close to our clients, listening to their needs, and supporting them through every stage of their journey.”

Standard Bank says the findings will help it shape better products and partnerships for township entrepreneurs. The bank already offers tailored tools like MyMoBiz, a simple business account for township traders, and SimplyBLU, a digital merchant platform that allows small businesses to accept card payments and manage invoices.

The report calls for more affordable digital solutions, easier access to funding, and step-by-step support to help township businesses formalise and grow unlocking one of South Africa’s most powerful engines for job creation and local development.