In an effort to integrate South Africa’s informal businesses into the formal economy, an app has been created to help connect skilled informal workers such as electricians, plumbers, and beauticians with consumers.

Research suggests that the country’s informal sector comprises 7.5-million participants, predominantly located in townships, and that township consumer spending has reached R900-billion, according to the latest Township Customer Experience Report, presenting significant economic potential. The sector, however, faces numerous challenges, such lack of confidence in business legitimacy, lack of access to finance, entrepreneurial skills gaps, and market opportunities.

GoodApp co-founder Shaheen Price cites a working paper from the Center for International Development at Harvard University which advocates for deregulating the management and oversight of South Africa’s informal sector in the longer term with immediate policy interventions including lowering, removing or changing the conditions of licensing and registration costs of, and stipulations to, informal trading as a starting point to realising the potential of the informal sector.

The Institute of Business Advisors Southern Africa (IBASA) says that the two types of businesses that can benefit most from formalising are those that are operating as informal, non-registered businesses and those that are registered businesses, but which lack well-structured processes. Once a business has been formalised, it is able to build up a track record, secure funding and scale operations. 

The recently launched GoodApp is designed to bridge the gap between consumers and a network of home service providers in the informal sector including electricians, plumbers, hairdressers, beauticians, make-up artists, nail technicians, massage therapists, handymen, painters, carpet cleaners, window cleaning services, swimming pool maintenance providers, movers and packers, and cleaners, amongst others.

Service providers listed on the app undergo a verification process which includes background checks, security clearances and certification verification. In addition, continuous performance monitoring is undertaken to ensure consistent reliability and performance. In addition, customers can access reviews and ratings prior to booking a service provider.  

By formalising and legitimising informal service providers, GoodApp aims to broaden market access to customers while also meeting consumer demands for service providers that are verified, trustworthy and professional, and customer service that is responsive and attentive – traits that help build trust and brand loyalty in a community-driven market.