Youth entrepreneurship is vitally important in South Africa as it offers major opportunities for economic growth in the country. Youth business funding in South Africa is available through a variety of options that Dream Team Capital can provide access to.
The government provides various funding opportunities for youth through numerous organisations and programmes, which are further discussed in the sections to follow.
The National Youth Development Agency (NYDA)
The NYDA is a South African-based agency established to address challenges that the youth encounter. The NYDA grant programme is one of the most well-known youth business funding opportunities provided by the government. The programme offers financial and non-financial support to entrepreneurs in the development phase or already existing businesses.
The NYDA targets qualifying youth businesses, including co-operatives and community facilitation projects, that show promising potential for growth. Additionally, entrepreneurs must have the necessary skills and experience to run the enterprise.
The types of businesses assisted through the grant programme include, but are not limited to, motor mechanics and panel beaters, electricians, plumbers, domestic appliance repair services, beauticians, hairdressers, cleaning companies, small scale recycling companies, street vendors, car washes, and others.
To qualify for an NYDA grant you must meet the following criteria:
- You must apply before the age of 35;
- Submit all required documentation;
- Proof of having attended a business management course;
- A 10-minute business pitch conducted telephonically or in person;
- A due diligence report will be conducted by an NYDA official; and
- The business must be in good standing as the NYDA will conduct credit checks for all grant applications for funding.
The Youth Challenge Fund (YCF)
The Youth Challenge Fund (YCF) is a youth start-up support programme that stimulates the establishment and growth of youth-owned businesses, to promote digital skills, grow the economy, and foster job creation. The programme offers non-financial support through business development support services, and financial support through grant and loan funding.
In line with the National Youth Policy, the YCF provides support to youth start-up businesses/enterprises that meet the following criteria:
- Are between the age of 18 to 35 years;
- Registered with CIPC and be prepared to register with SARS & UIF;
- 100% South African owned;
- Are adequately involved in the day-to-day operations and management of the business with at least one or more of the members being full-time employees of the company, especially the majority shareholder or essential personnel/applicant;
- Prepared to participate in Business Development Support and mentorship (pre and post); and
- Commercially viable, sustainable, and feasible business concept.
The GRO-E Youth Scheme
The GRO-E Youth Scheme, through the IDC, encourages youth entrepreneurship and employment creation, to thereby grow the South African economy. The scheme offers up to 40% of the investment amount or a maximum of R1.5 million.
Gro-E Youth Scheme Qualifying Criteria:
- Available to South Africans and permanent residents up to and inclusive of the age of 35 years at the time of final approval;
- Youth shareholding should be at least 26%;
- Youth operational involvement in the business;
- Applicant can be a start-up or expansion within South Africa;
- Cost per job of up to R800 000 for the duration of funding – calculated using total project cost;
- Applicant to meet the BBBEE requirements of the IDC – level 4 or a plan to achieve this within 24 months; and
- Own contribution will be determined by the financial capacity of the entrepreneur and the cash flow profile of the business.
With all of these opportunities available for the youth of South Africa, DTC can assist to put together conforming developments to provide you with the highest chances of success with your application.
For more information on youth business funding in South Africa – Contact DTC!