TOWNSHIP ENTREPRENEURS BUILD THRIVING BUSINESSES BEYOND TRADITIONAL STREET TRADE
Lerato Nkgapele starts her workday in Diepsloot, Johannesburg, processing orders for sneakers, iPhones, hair extensions, blankets, and curtains. Her business, ELCEE Trading Enterprise, runs entirely online and brings in between R3,000 and R5,000 daily. She is not an outlier.
Across South Africa’s townships, a quiet economic transformation is reshaping how millions of people earn a living. The informal sector, long associated with street vendors and corner shops, now includes sophisticated online operations that employ workers and generate revenue that circulates through entire communities. For ordinary South Africans, this shift carries direct consequences for income, stability, and access to goods and services.
The scale of what is at stake is hard to overstate. The informal sector is estimated to be worth between R900 billion and R1 trillion, placing it among the country’s largest sources of employment. For millions of households, township businesses are not a supplementary income stream. They are the primary one.
That reality has begun to reshape how major institutions approach these communities. Banks have started competing aggressively for informal business customers, recognising that township entrepreneurs face many of the same financial needs as their formal-sector counterparts. Capitec, the largest player in this space, already serves a significant share of these entrepreneurs. CEO Graham Lee has pointed out that the bank’s database of 26 million customers provided the foundation for designing products tailored specifically to informal operators. The message from one of South Africa’s biggest banks is clear: this market is not peripheral.
Meanwhile, large corporations listed on the Johannesburg Stock Exchange have moved to deepen their presence in township supply chains. Tiger Brands has expanded its distribution network to reach over 110,000 spaza shops across the country. The company works with local midi-wholesalers and runs empowerment programs designed to connect grassroots township enterprises with formal supply chains, creating pathways for smaller businesses to grow and for communities to maintain reliable access to goods.
What changed is the framing. Township businesses were once treated as a temporary or marginal feature of the economy, something that would eventually be absorbed into formal employment. Institutions now treat the informal sector as a core market, and that shift has practical consequences for workers and entrepreneurs. Access to banking services, integration into supply chains, and structured business support can help informal operations scale gradually, stabilise employment, and reduce the vulnerability that has historically defined work in this sector.
For entrepreneurs like Nkgapele, the opportunity does not depend on waiting for formal-sector jobs to materialise. Digital channels have lowered the barriers to entry, and institutional engagement (however commercially motivated) is beginning to extend resources that were once out of reach for township operators.
The boundary between informal and formal business is blurring. Whether that convergence translates into broader economic security for the communities driving it remains the open question.