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The National Empowerment Fund (NEF) and the National Youth Development Agency (NYDA) have signed a partnership to launch the National Youth Fund.
The fund starts with $6.13 million: $5.52 million from the NEF and $613,332 from the NYDA as Seed capital for youth entrepreneurship.
The agreement was signed on Monday, 14 September, at the NYDA’s head office in Sunninghill. NEF Chief Executive Officer Mziwabantu Dayimani and NYDA Chief Executive Officer Ndumiso Kubheka signed on behalf of their organisations.
“This agreement commits R100 million to helping young people build businesses. Its significance lies in bringing our institutions together around the needs of entrepreneurs who have the ambition to grow but need finance and practical support to take the next step,” said Mziwabantu Dayimani, CEO of the NEF.
The National Empowerment Fund is a government financial institution in South Africa that gives loans to Black-owned businesses to help them grow.
The National Youth Development Agency is a government agency that supports young entrepreneurs with training, grants, and business incubation programs.
The five-year agreement connects businesses supported by the NYDA to growth finance from the NEF. The NYDA will help prepare youth-owned businesses for investment, while the NEF will evaluate their financial needs and possibilities for expansion. This partnership targets individuals aged 18 to 35 and their businesses.
“A business that has benefited from NYDA support may reach a point where it needs further capital to expand. This partnership gives us a way to work with the NEF to prepare that business for investment and assess the finance it needs. We want entrepreneurs to understand what is required and receive support that helps them address the gaps,” said Ndumiso Kubheka, CEO of the NYDA.
A total of $6.13 million will be allocated for business support, with $613,332 from the NYDA for enterprise development and investment readiness.
This support will mainly provide assets to beneficiaries, along with feasibility studies and incubation services. The NEF will provide $5.52 million as repayable loans after businesses pass their assessment process.
Additionally, there will be support for businesses after they receive funding. A joint committee from both organisations will meet quarterly to review the funding progress and will provide progress reports. The NEF and NYDA may also seek more funding partners together in the future, with a written agreement.
Dayimani spoke about the responsibility of making the partnership work in practice: “We must make the process clear, keep applicants informed and ensure that our teams follow through on their responsibilities. We must also pay attention to how businesses progress after receiving support, so that we can identify difficulties early and respond appropriately.”
