Partnership to provide support to youth entrepreneurs
For the majority of young South Africans obtaining finance from conventional commercial lenders is a very real challenge. Often young aspiring entrepreneurs are rendered ineligible for finance due to their financial backgrounds. Stringent criteria such as requirements for collateral and credit checks, make it difficult for potential youth entrepreneurs from poor backgrounds to access funding from commercial finance institutions.
To address these and other challenges faced by youth enterprises, the Industrial Development Corporation (IDC), the Small Enterprise Finance Agency (sefa) and the National Youth Development Agency (NYDA) have come together to form a R3 billion partnership that will see youth-owned businesses being financed and supported by three institutions. “The birth of this partnership is a response to the issues that young people have continued to raise with us, including their cry that government and its related institutions and agencies need to open up more opportunities for youth to access business funding either to start or expand existing businesses; and this must happen with limited red-tape and its related complications” says Khathu Ramukumba, NYDA CEO.
The cooperation agreement between the IDC, sefa and the NYDA also responds to the Youth Employment Accord signed in 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 committed to support initiatives giving young people opportunities as entrepreneurs, as employees and as trainees.