Youth business owners will soon have added support thanks to the launch of the new youth strategy.
Youth entrepreneurs can expect added support from the government this year in the form of additional funding and business support, following the launch of the Youth Development Strategy and the establishment of a new youth directorate at the Department of Trade and Industry (DTI).
The strategy, launched in November 2013, seeks to boost youth entrepreneurship and tackle youth unemployment. About 42% of young people under 30 are unemployed, compared to less than 17% of adults over 30.
Added to this, the 2012 Global Entrepreneurship Monitor report reveals that just 5% of youth between 18 and 24 years old and 9% of those aged between 25 and 34 years old are engaged in starting or running new businesses of less than three-and-a-half years old.
The report also reveals that youth in South Africa are less likely to see business opportunities than youth in other African countries, and they are less likely to believe they have the needed entrepreneurial capabilities than their African peers.
The new strategy details how the DTI plans to target interventions such as mentorship via the Small Enterprise Development Agency (Seda), infrastructure support, links to procurement opportunities, and youth entrepreneurship awards.
Added to this the department also plans to:
- Set up five incubation centres with the help of Seda to support youth enterprises.
- Launch a youth entrepre-neurship collateral fund to provide grants to start-up enterprises owned by young people.
- Introduce a data system and research programme to track youth entrepreneurship.
Access to finance
Last year the Industrial Development Corporation (IDC) and the Small Enterprise Finance Agency (Sefa) announced a collective R2.7 billion in ring-fenced funding over the next five years that will be available to youth entrepreneurs. Youth entrepreneurs can also get grant funding, from the National Youth Development Agency (NYDA).
In May 2013, the NYDA’s board took a decision to no longer give out loans. Instead, the agency will offer grants of between R1 000 and R100 000 to survivalist micro firms.
NYDA chairperson, Yershen Pillay, said last year that the agency had about R25 million that would fund business vouchers and mentorship support and allow it to disburse grants to about 37 000 youth.
To access funding, entrepre-neurs will have to first apply for a voucher to get business development support and a mentor.
Seda offers various support programmes to young entrepreneurs.
About 45% of the 10 208 people Seda supported in 2012/3 were aged between 18 and 35, according to the agency’s latest annual report.
Seda spokesman, Marius de Villiers, says Seda will hold a number of Entrepreneurship Week events around the country, including at Kokstad, KwaZulu-Natal, on Thursday, 20 February.
Dates for Mpumalanga and Gauteng will be announced shortly, while events in the remaining provinces are expected to be held near the end of 2014, De Villiers says.
Another government agency, the Technology Innovation Agency’s (TIA) Youth Technology Innovation Fund is aimed at innovators between the ages 18 and 30 years.
The fund helps finance services such as developing a business plan, South African Bureau of Standards testing and incubation.