The KwaZulu-Natal government on Thursday awarded just over R70 million to those chosen for the KZN Youth Business Development Fund.
The fund – launched in January – would enable the province’s youth to become job creators instead of job seekers, it was announced at the time.
Speaking in Pietermaritzburg on Thursday, provincial Premier Sihle Zikalala said recipients were chosen following a “lengthy, rigorous process of examining business proposals” that had the greatest potential for success.
“The total number applications that were received and processed was 2,246. Of these, 448 were shortlisted for due diligence, and 55 were ultimately awarded grants totalling R71,401,486.14. This means that we have exceeded our limit by near one and a half million rand,” he said.
But, said Zikalala, the money would not be deposited into the accounts of recipients. Instead, the funds would be used for “equipment and instruments” to be used in the productive running of the businesses.
“In this regard, some of the youth businesses that did not succeed, while showing a potential, will be placed in a business development programme wherein gaps and shortcomings identified will be addressed and hopeful they will benefit in future,” said Zikalala.
He said that even though funding was limited to R70 million, there was an “overwhelming need” amongst the businesses.
“As government, we are encouraged to see the youth of KZN making strides to own their own businesses, and we encourage those who did not make it and many more others to apply for the second phase of the funding, which as was announced in the State of the Province Address, has also been capitalised to R70 million by our government,” he said.
Zikalala thanked the committee that assessed the proposals, conducted due diligence and ultimately selected the recipients.
He also applauded ABSA for partnering with the provincial government saying, “As I mentioned during the State of the Province Address, through government’s engagement with the private sector, ABSA pledged to allocate a R70 million loan dedicated to further support youth-owned enterprises that may require more funds than what government has allocated from the seed funding.”
Zikalala also encouraged industries to work with the government and “deserving youth owned businesses” to ensure that their enterprises succeeded.
He added that research had shown that in many developing countries, it was Small, Medium and Micro Enterprises that were creating employment.
“The 2019 SME and Entrepreneurship Outlook report on OECD countries revealed that SMEs account for about 60% of employment and between 50% and 60% of value added, and are the main drivers of productivity in many regions and cities,” said Zikalala.
As for South Africa, said Zikalala, the 2017/18 Global Enterprise Monitor (GEM) report indicated that the country’s entrepreneurial activity was at its highest since 2013.
The report also indicated that the total early-stage entrepreneurial activity was at 11 % in 2017, which was 4.1 % higher than 2016.
“I have no doubt that this came as a result of the dedicated focus introduced through the policy of radical economic transformation (RET). Today is yet another testimonial that RET is not stealing from others or disruption of other businesses, but is a dedicated support to small entrepreneurship.”
– ANA, editing by Lindiz van Zilla