18 August 2014
The National Youth Development Agency, Industrial Development Corporation and Small Enterprise Finance Agency have launched a R2.7-billion Youth Fund aimed at creating millions of sustainable jobs in the country.
The launch, which took place at Langa township in Cape Town on Friday, follows the signing last year of the Youth Employment Accord, committing the government and its social partners to prioritising youth employment and skills development.
The Small Enterprise Finance Agency (Sefa) has set aside R1.7-billion for the fund, with the Industrial Development Corporation (IDC) contributing the remaining R1-billion.
The National Youth Development Agency (NYDA) will screen and recommend young entrepreneurs put forward by the IDC and Sefa.
NYDA CEO Khathutshelo Ramukumba, speaking at Friday’s launch, said the fund would help break the chains of poverty by giving young South Africans the chance to participate in the economy.
Ramukumba urged young people to aim higher and apply for funding in the productive sector of the economy in order to amass enough wealth to generate large-scale jobs.
“We want more young people to enter the space of manufacturing because we want these young people to be the industrialists of tomorrow,” he said.
“If you look at the reason why our economy today is not able to provide the necessary jobs that are required to take the majority of our people out of the poverty situation, it is because we have not created new industries in the main.”
Sefa CEO Thakhani Makhuvha said that, unlike commercial banks, Sefa agency was a developmental institution that did not require collateral to grant an applicant finance.
It offers funding of between R500 to R5-million to proposals that can demonstrate a sustainable business model.
Makhuvha said even those who had debt from study loans were welcome to apply for funding, as the agency never shut its doors on high-risk customers. However, applications from those with adverse and reckless credit records would be closely scrutinised.
“We can give you a maximum of 12 months to start paying [the loan back]. You don’t have to have collateral, you just have to demonstrate that your business can project sustainability.”
Makhuvha said Sefa had studied the models of agencies from other countries that offered development support to small businesses, including Brazil’s successful business agency Sebrae.
Recent reports indicate that the small and medium enterprises sector generates over half of all jobs in the country, while also accounting for about 70% of all new jobs.