Three development finance institutions (DFIs) have signed a cooperation agreement that will enable youth-owned businesses easier access to finance. The agreement between the Industrial Development Corporation (IDC), the Small Enterprise Finance Agency (sefa) and the National Youth Development Agency (NYDA), will result in a coordinated approach to providing funding and support services to these businesses.
Emerging entrepreneurs will be able to approach any of the DFIs for funding and business support initiatives offered by each institution. The cooperation agreement between the IDC, sefa and the NYDA is a follow-up to the signing of the Youth Employment Accord on 18 April 2013, where government and its social partners made a commitment to prioritise youth employment and skills development.
The Youth Employment Accord is one of a series of social pacts intended to help achieve one of the New Growth Path goals of creating five million new jobs by 2020. In terms of the Youth Employment Accord, government has promised to support initiatives, giving young people opportunities as entrepreneurs, as employees and as trainees.
On 18 April, as an immediate response to the Youth Empowerment Accord, the IDC announced it had set aside R1-billion from its Gro-e-Scheme to fund businesses owned by young entrepreneurs. As part of the accord, the IDC will work closely with sefa and the NYDA to market the fund.
“In signing the cooperation agreement, all institutions are throwing their weight behind promoting youth entrepreneurship. By prioritising youth economic development we are stepping up the fight against youth unemployment,” says Geoffrey Qhena, chief executive officer for the IDC.
Qhena says that youth-owned businesses will benefit from the partnership through development funding, coaching and mentoring provided by these institutions. The NYDA is a development agency established to tackle challenges faced by South Africa’s young people.
Acting chief executive officer, Ayanda Makaula, says: “We are incredibly excited about this unique partnership and are confident that the launch of this new programme will serve as a vital opportunity to facilitate the growth and development of young entrepreneurs”.
The NYDA will serve as a conduit for the screening and recommendation of young entrepreneurs to access the financing offered by the IDC and sefa. The NYDA provides
business development support through its voucher programme and grant programme, this will complement the funding offered by IDC and sefa.
In 2012 sefa, a 100% IDC-owned agency was set up to provide access to finance for small businesses and co-operatives seeking funding of up to R5-million. “It is a well-known fact that small businesses often face challenges in accessing funding and business support from the various institutions that exist. Sefa has allocated R1.7-billion towards youth-owned businesses over the next five years” says Thakhani Makhuvha, sefa chief executive officer.
The partnership between the IDC, NYDA and sefa is the first of its kind and will ensure that youth-owned businesses get the necessary support to contribute to the economic development of the country.
For more information:
Mandla Mpangase
Public Relations Manager: IDC
Cell: 082 880 6074
Tel: 011 269 3282
Email: mandlam@idc.co.za
Linda Mbongwa
Media Liaison Officer: NYDA
Cell: 082 315 3217
Tel: 011 651 7053
Email: linda.mbongwa@nyda.gov.za
