How GoodApp Aims to Formalise SA’s Informal Service Sector

GoodApp is stepping in as an innovative online platform that connects consumers with verified home service providers from the informal sector—ranging from electricians and plumbers to beauticians and hairdressers.

It’s a fact that South Africa continues to grapple with a severe unemployment crisis, leading to the highest income inequality globally, with a Gini coefficient of 0.63 in 2023. One major challenge is the difficulty of transitioning from the informal to the formal economy, limiting opportunities for small businesses and entrepreneurs. GoodApp is addressing this gap.

By offering a secure and professional marketplace, GoodApp aims to empower these workers, helping them build trust, access new clients, and ultimately transition into the formal economy.

Unlike other emerging markets like Brazil, South Africa has high barriers to entry for informal businesses, making it difficult for them to scale.

The informal sector, which includes an estimated 7.5 million participants, holds massive untapped potential. However, without access to finance, proper business structures, or market integration, many remain stuck in survival mode.

A working paper from the Center for International Development at Harvard University highlights how supporting the informal economy could unlock job opportunities. It suggests that South Africa has historically overlooked policies that would enable growth in this sector.

Research cited in the paper shows that direct financial support, such as grants, can increase business assets by 57%, work hours by 17%, and earnings by 38%. Moreover, informal businesses that formalize tend to hire more staff and contribute to the country’s tax base.

Despite its potential, the township economy faces significant challenges, including limited infrastructure, restricted funding options, and a lack of entrepreneurial training.

The Institute of Business Advisors Southern Africa (IBASA) identifies two key groups that could benefit from formalization: fully unregistered businesses and registered businesses lacking structured operations. By formalizing, businesses can establish credit histories, access funding, and scale sustainably.

The Harvard study recommends policy changes, including reducing licensing and registration costs and easing trading restrictions, to unlock the sector’s economic potential.

However, platforms like GoodApp provide an immediate solution by bridging the gap between informal service providers and consumers

What sets GoodApp apart is its rigorous verification process. Every service provider undergoes background checks, security clearances, and certification verification, ensuring professionalism and reliability. The platform also includes ongoing performance monitoring, customer reviews, and ratings to maintain service quality.

For township service providers, GoodApp presents an opportunity to reach customers beyond their immediate communities, tapping into South Africa’s R900 billion township economy.

According to the latest Township Customer Experience Report, nearly half of respondents spend over 25% of their income locally, signaling a strong shift toward hyper-local economic activity. The report also highlights a growing demand for trustworthy and transparent service providers—precisely what GoodApp delivers.

By formalizing informal service providers and offering a reliable, easy-to-use platform, GoodApp fosters economic inclusion and trust.

Not only does it help small businesses thrive, but it also empowers consumers with access to professional, vetted services. As South Africa looks for solutions to its employment crisis, platforms like GoodApp play a crucial role in driving sustainable, community-driven economic growth.

GoodApp is available to download on the Apple Store and Google Play Store.

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