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Awesome Access to Funds: Money for Youth Entrepreneurs Now

Access to Funds: List of Funders for Youth Entrepreneurs. Entrepreneur options and strategies to explore and secure venture capital. Youth disillusioned by job hunting or unsuccessful at finding further education and training should consider alternatives.

The Youth Entrepreneurs Programme: Access to Funds

nrf funding

Entrepreneurship options and strategies for access to funds.

Access to Funds for Youth Business Ventures

Youth entrepreneurs in South Africa, like entrepreneurs in any other country, often face challenges when it comes to funding their business ventures. However, there are several options and strategies they can explore to get access to funds:

1. Government Grants and Programs Provide Access to Funds

South Africa offers various government grants and programs aimed at supporting youth entrepreneurship. These include initiatives from organizations like the National Youth Development Agency (NYDA) and the Small Enterprise Development Agency (SEDA). Research and apply for these programs that match your business’s needs.

2. Angel Investors Let You Have Access to Funds:

Seek out angel investors who are interested in supporting startups. Angel investors are often individuals with high net worth who provide capital in exchange for equity in your business. South Africa has a growing community of angel investors and venture capitalists.

youth funding

3. Venture Capital Gives Youth Access to Funds:

If your business has significant growth potential and is in a high-growth sector, consider seeking venture capital funding. Venture capital firms in South Africa may be interested in backing innovative startups with the potential for large returns.

4. Business Incubators and Accelerators Provide Access to Funds:

Joining a business incubator or accelerator program can provide not only funding but also mentorship, networking opportunities, and access to resources. Organizations like 22 on Sloane and Founders Factory Africa run such programs.

5. Crowdfunding Gives You Easy Access to Funds:

Platforms like Thundafund and BackaBuddy enable entrepreneurs to raise funds from a large number of individuals. This can be an effective way to validate your business idea and gain initial capital.

6. Bank Loans:

Explore traditional bank loans and financial institutions for business financing. Many banks in South Africa offer loans specifically designed for small and medium-sized enterprises (SMEs).

7. Grants and Competitions Are Ways to Get Access to Funds:

Keep an eye out for business competitions and grants offered by organizations, corporations, and foundations. These can provide funding and exposure for your business. Organizations like the Tony Elumelu Foundation and the Anzisha Prize have offered such opportunities in the past.

8. Bootstrap:

While not a source of external funding, consider starting your business with your savings and reinvesting profits to grow. This approach allows you to maintain full control but may limit the speed of growth.

9. Peer-to-Peer Lending is Also Access to Funds:

Platforms like RainFin and FundingHub offer peer-to-peer lending options where individuals lend money to businesses. Interest rates and terms may vary, so be sure to research thoroughly.

10. Family and Friends Access to Funds:

Don’t underestimate the support you can receive from family and friends who believe in your business idea. However, be cautious about mixing personal relationships with business ventures, and ensure clear terms are in place.

11. Partnerships and Joint Ventures:

Collaborating with other businesses or individuals can provide access to funding as well as shared resources and expertise.

12. Microfinance Institutions:

Microfinance institutions in South Africa provide small loans to entrepreneurs, often in underserved communities. These loans can help you start or expand your business.

Remember that securing funding is often a combination of various sources and strategies. It’s essential to have a well-prepared business plan and financial projections to attract potential investors and lenders. Additionally, networking and building relationships within the South African entrepreneurial ecosystem can open doors to funding opportunities and valuable support.

Entrepreneur Youth Find Your Freedom: Access to Funds

In 2000 the government announced the establishment of the Umsobomvu Youth Fund, out of the proceeds of the demutualisation of Old Mutual and Sanlam.  The fund started operating in 2001, with the mandate to facilitate the involvement of young people in economic activities.  Umsobomvu implements a youth enterprise programme, providing both financial and non-financial support to youth enterprises.

The youth entrepreneurship programme has three major projects:

An estimated 700 SMMEs and 3 640 micro-enterprises will benefit from these projects over the next three years, and approximately 17 000 jobs are expected to be created.

Enterprise fundingRecently launched FNB-Momentum-UYF Progress Fund, which complements the Franchise Fund, launched in partnership with business partners.
Micro-financeFocus on entry-level investments, and its pilot projects with the Nations Trust and Micro Enterprise Finance are funding micro-enterprises and co-operatives.
Business development services voucherHelps young entrepreneurs to access quality business support from approved service providers through vouchers, ranging in value from R1 500 to R23 000.
Take it to the People projectLaunched recently to create locally based economic opportunities for young people. The project focuses on income generation and self-employment for young people living in 21 urban and rural areas identified as significant “poverty pockets”. The project aims to develop local solutions to unemployment by investigating options for youth development in the form of micro and small businesses and co-operatives. It will work in conjunction with local municipalities and donors.
Contact, information & counsellingAim to reach more than 730 000 young people over the next three years, offering information and counselling support regarding career development, employment and entrepreneurship through a youth line, advisory centres and an Internet portal. The first 12 of 33 planned advisory centres have already opened in the provinces of Gauteng, KwaZulu-Natal, Limpopo, Northern Cape, North West, and Western Cape.
School to WorkIs designed to transfer high-level technical skills and to facilitate work experience for unemployed matric and tertiary graduates. It also aims to introduce black youth to previously inaccessible careers, such as IT and accounting.
Youth ServiceFocuses on unemployed youth who have no tertiary education, enabling them to acquire the skills, competencies and experience they require to achieve economic independence. This is done through a structured learning programme and accredited through a SETA.

Small, Micro and Medium Enterprises (SMME’s) Support: Access to Funds

In addition to the listed institutions, there are also NGOs, donors and private sector organisations (e.g. the programme by the Banking Council of SA) who support SMMEs.  The Black Economic Empowerment Commission, an initiative of Black businesses, also highlighted the importance of SMME development for broad-based black empowerment.

The institutions listed in the table below support small businesses.

Institution

Services

Target

Centre for Small Business PromotionThis is a Chief directorate in the DTI, responsible for policy and coordination of support programmes for SMMEs. It also mobilises funds and supervises the establishment of new institutions. 
Ntsika Enterprise Promotion AgencyProvides non-financial support such as mentoring programmes, business advice, help with government tenders and technology support to small enterprises, through:
  • Local business service centres (LBSC)
  • Tender Advice Centres (TACs)
Targets survivalist, micro and very small enterprises.
The majority of the LBSCs focus on a start-up businesses, targeting the unemployed, women and youth.
KhulaProvides access to finance through:
  • Khula Credit Guarantee Scheme – provides guarantee products to banks.Other institutions and NGOs, referred to as Retail Finance Intermediaries (RFIs) borrow from Khula to make loans to SMMEsKhula-Start: access to micro-credit in rural areas
Mainly targets very small, small and medium enterprises, with two small programmes for the survivalist and micro sectors.
NAMACTwo key programmes
  • Manufacturing advisory centres (MACs), provide support for small-scale manufacturing businesses.
  • Business Referral and Information Network (BRAIN) – information and a helpline.

The MACs are mainly for small and medium, more formal businesses.BRAIN for the entire spectrum of SMMEs.

Provincial SMME desksTo provide a one-stop information centre to SMMEs and develop enabling government policy to support SMMEs in each province.  Activities of the SMME desks include (though not in all provinces):
  • Keeping databases of SMMEs in the province
  • Developing SMME-orientated procurement and sub-contracting policies for the provincial government
  • Targeted support programmes for HDIs, women, contractors, tourism entrepreneurs, small/micro manufacturers, etc
Land BankFinance agricultural businessesFrom small to large-scale farmers.
Industrial Development CorporationSupports and funds various industrial development programmes.Predominantly large-scale projects, but some small to medium enterprises.  Has a specific BEE mandate.
National Empowerment CorporationFunded by government, it provides funding for black economic empowerment venturesFunded by the government, it provides funding for black economic empowerment ventures

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Leonie Hall

Leonie Hall, disruptive thinker and dynamic strategist, is an expert in education, development, quality management and innovation. She has spoken at local and international conferences; and currently works as an independent consultant and content developer. Contact Leonie for a consultation.

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