A cleaning round can be busy, respected and genuinely profitable in a South African township and still be unable to borrow a rand, win a contract from a formal company, or use most of the tools that would let it grow. The demand is real; the ceiling is administrative. That gap between a working business and a recognised one is now measured, and it is wide. According to Standard Bank’s first Township Informal Economy Report, released in October 2025, the township economy is worth close to R1 trillion, yet roughly 80 percent of the businesses inside it are not registered.
The number is not a sign of failure. It is a sign of an economy that grew faster than the systems meant to record it. The report, drawn from enterprises turning over between R100,000 and R50-million a year across Gauteng, KwaZulu-Natal, the Western Cape, Limpopo and the North West, describes businesses that are resilient and deeply embedded in their communities but structurally cut off from the next stage of growth. Naledzani Mosomane, who heads enterprise and supplier development at Standard Bank’s business and commercial bank, framed the purpose plainly: the report, she said, “was commissioned to listen more closely, understand more deeply and act more meaningfully”, reflecting “the lived realities of township entrepreneurs, their resilience, their contribution, and the barriers that hold them back.”
What the gap actually costs
For a cleaning operator, the cost of staying informal is specific rather than abstract. Finance is the first door that stays shut: the report found that fewer than 9 percent of these businesses have access to bank loans, which leaves most relying on personal savings or family to buy a machine or bridge a slow month. The second door is the formal market. A managing agent, a school, a corporate office – the clients who sign the steady monthly contracts a cleaning business wants – increasingly require a supplier to be registered, tax-compliant and, if it employs people, covered for UIF and for workplace injury under COIDA. A business that cannot produce those documents is not turned away rudely; it is simply never shortlisted. The third door is the set of digital and growth tools – supplier databases, credit, payment systems – that assume a legal entity on the other side.
The mechanism: how a business becomes legible
Formalisation is often described as a single act – registering with the CIPC – but for a service business it is better understood as making the business legible: turning what the owner knows into what an outsider can verify. That happens in layers. Registration creates the legal entity. A tax number and, where turnover requires it, VAT registration make it accountable. Registering employees for UIF and COIDA makes it a lawful employer. And a record of past work – who was cleaned for, for how long, to what standard – makes it credible to the next client who was not there to see the last job. The first layers are paperwork a founder can complete in days. The last is the one that quietly decides who wins contracts, because it is the answer to the buyer’s real question: can I trust this person in my building?
This is where a cleaning business’s own records and the way its people are vetted start to matter as much as its CIPC certificate. A verifiable work history is an asset, and it can belong to the worker as much as to the firm. On an introduction platform such as Kleana, a cleaner can carry a Verified listing, which means a person has actually sighted her identity document and telephoned at least one long-term former employer, and the listing says so. That is a portable, checkable record of exactly the kind the informal economy usually cannot produce – proof, held by someone other than the worker, that she is who she says and has worked where she says. For a small cleaning business assembling a team that a formal client will accept, records like that are a shortcut to the credibility registration alone does not confer.
What changes when the gap closes
Closing the gap changes the class of opportunity a business can reach. The same round that today collects cash from households can, once registered and documented, tender for the monthly contract at the clinic or the body corporate, open a business bank account, and be paid by transfer – which the report notes most of these entrepreneurs already prefer, with a majority favouring electronic payment over cash. It also changes the founder’s own security: an unregistered business cannot easily be sold, insured or passed on, because on paper it does not exist. Formalisation converts a personal hustle into an asset that can outlast a bad month or a founder’s illness. Registered employees, too, gain what informality denies them – UIF contributions, COIDA cover if they are hurt on a job, and the written terms the Basic Conditions of Employment Act assumes – which makes the business easier to staff and harder to lose good people from.
Formalise around a specific prize
The move that matters is to formalise for a reason, not as a chore. Registration on its own changes little; registration aimed at a named contract you cannot currently bid for changes everything. Pick the client you are locked out of – the school, the estate, the corporate supplier list – find out exactly what it requires, and build only the compliance that unlocks it: the registration, the tax status, the employer cover, the work record. Do that, and the R1 trillion the township economy is already worth stops being a figure in a bank’s report and becomes a set of contracts a documented cleaning business can finally reach.
Source: Kleana Africa – kleana.africa
