South Africa will on Friday begin offering loans through a 2.5 billion rand ($135 million) Youth Fund aimed at supporting small businesses, as the government steps up efforts to address one of the world’s highest youth unemployment rates.
Nearly half of South Africans aged 15 to 34 are unemployed, according to Statistics South Africa. The new fund seeks to change that by backing high-potential small and medium enterprises (SMEs), National Youth Development Agency (NYDA) Deputy Chairperson Bonga Makhanya said.
Spearheaded by the NYDA and set to be unveiled by Deputy President Paul Mashatile, the initiative marks a shift from small grants toward larger, equity-based and loan investments in youth-owned enterprises, according to Bloomberg.
Unlike previous NYDA programs that offered grants of up to 250,000 rand, the new fund will invest between 750,000 rand and 2 million rand per business, depending on the enterprise’s needs and growth prospects. Financing will combine loans and equity stakes.
Provincial and corporate backing
The NYDA has committed 1.2 billion rand of its reserves to capitalise the fund, alongside contributions from provincial governments, including KwaZulu-Natal, Mpumalanga, and Gauteng.
The agency is also in talks with the Industrial Development Corporation, Development Bank of Southern Africa, Public Investment Corporation, and several mining companies to co-fund youth ventures as part of broader enterprise development initiatives.
The fund will target strategic sectors such as renewable energy, mining, agriculture, industrial manufacturing, and processing.