Enthusiasm for new business finance through youth agency

07 NYDA gets new board 300x196 Enthusiasm for new business finance through youth agency

New board members of NYDA – Deputy Minister in the Presidency Obed Bapela during welcome and introduction of new members of National Youth Development Agency board at the Union buildings, Pretoria. 11 April 2013

THE recent appointment of the new board of the National Youth Development Agency (NYDA) sparked enthusiasm around the prospects of youth-lead businesses gaining access to business financing not previously available to them.

After almost a year of delays, President Jacob Zuma appointed the new board of the NYDA earlier this year, with Young Communist League chairman, Yershen Pillay, at its helm.

The newly appointed board presented its vision to Parliament earlier this year. It included a plan to tap into a R1billion facility from the Industrial Development Corporation (IDC) and a R1.7billion facility Small Enterprise Finance Agency (Sefa) respectively, made available to boost young entrepreneurs.

The agency’s R3bn partnership with the IDC and Sefa, has bolstered the enthusiasm with which the new broom in youth business finance has been greeted.

With this partnership formalised, the NYDA is expected to move slowly away from providing enterprise finance, as the IDC and Sefa are due to bring the capacity and experience that the NYDA lacked.

The head of Parliament’s appropriations committee, Elliot Sogoni, said his committee was impressed with the NYDA’s new plan. “There seems to be direction,” Sogoni said.

Other new board members are North West ANC spokesman Kenny Morolong as deputy chair, former South African Students Congress president Mothupi Modiba, Inkatha Freedom Party Youth Brigade deputy national chairman Zandile Majozi, the head of marketing at radio station Umhlobo Wenene Ayanda Bambiso, and the deputy secretary-general of Disabled South Africa Nyalleng Potloane.

The NYDA is has been rocked by allegations of political patronage since it was formed on June 16, 2009, and has been operating without a board for a full financial year since the term of the last board expired in April last year.

In its presentation to parliament, the NYDA outlined a new strategy for the agency, which would focus on a drive to boost credibility over the board’s three-year term.

At a media briefing, Pillay said the board had shifted the core business of the agency away from enterprise finance towards education and skills development.

Loans will be phased out over time, and instead the NYDA would now issue grants of between R1 thousand and R100thousand

“The plan is to leverage on partnerships in the public and private sector fuelled by the new drive at restoring credibility,” Pillay said.

Pillay said the issue of credibility for the NYDA stemmed from the confusion following the merger between the former National Youth Commission and the Umsobomvu Youth Fund in 2009.

“The transition was difficult and that is why we are looking at reviewing the Act to make sure that it is clear on the mandate of the NYDA,” Pillay said.

Morolong said the agency would, as part of its programme, organise discussions with young people to get their views on the NYDA and how its services could be improved.

The new board comes in at a time when not only had the NYDA lost credibility, particularly with young people, but also amid fresh controversy regarding the R2.4million they gave to the South African Youth Council to fund its conference.

The height of its criticism came in 2010 when the agency funded a R100million international youth conference, later dubbed the “kissing festival” as it was regarded a waste of money.

Early this year, NYDA CEO Steven Ngubeni petitioned the appropriations committee to increase the NYDA’s budget to just over R1bn, citing the magnitude of youth unemployment. Sogoni said the door was not totally closed on the NYDA’s request for more funds.

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