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Bloomberg reports that on Friday SA started offering loans from a R2.5 billion Youth Fund aimed at supporting small businesses as part of a push by the government to tackle one of the world’s highest youth unemployment rates.
The fund aims to address this by supporting high-potential small and medium enterprises. The initiative, spearheaded by the National Youth Development Agency (NYDA) and set to be announced by Deputy President Paul Mashatile, is designed to shift the agency’s model from offering small grants toward making larger, equity-based and loan investments in enterprises owned by young people. Unlike previous NYDA programs that offered grants of up to R250, 000, the new fund will invest between R750,000 and R2 million, depending on the business case. Financing will consist of a mix of loans and equity stakes. “We want to invest in youth-owned SMEs that can grow into sustainable enterprises — the kind that could one day list on the JSE,” the NYDA’s Bonga Makhanya explained. The NYDA is capitalizing the fund with R1.2 billion of its own reserves and provincial contributions. It is also courting partnerships with the Industrial Development Corporation, the Development Bank of Southern Africa, the Public Investment Corporation and several mining companies. The fund will target sectors including renewable energy, mining, agriculture, industrial manufacturing, and processing.
- Read the full original of the report in the above regard by Khuleko Siwele at Moneyweb
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