Question NW133 to the Minister of Small Business Development
18 March 2024 - NW133
Luthuli, Mr BN to ask the Minister of Small Business Development
(1)What (a) has been the total annual budget of the Youth Challenge Fund (YCF) since its inception and (b) total amount of the specified budget has been allocated towards assisting youth-owned businesses; (2) what criteria were used in the process of approving and/or granting loans and other financial assistance to youth-owned businesses; (3) whether have been any youth-owned businesses that were denied any grants or financial assistance in the specified period; if not, what is the position in this regard; if so, what were the reasons?” NW139E
Reply:
I have been advised that:
1. Since its inception in the 2021/22 financial period, the Youth Challenge Fund (YCF) was allocated a budget of:
(a) R296 459 000,
(b) As at 19 February 2024, sefa had disbursed R152 597 678 to 44 Youth-owned businesses under the Youth Challenge Fund.
2. The YCF provides support to youth start-up businesses/enterprises that meet the following criteria:
- Are between the age of 18 to 35 years.
- Majority youth-owned with at least 51% youth shareholder/s.
- Registered with Companies and Intellectual Property Commission (CIPC) and be prepared to register with the South African Revenue Service (SARS) and Unemployment Insurance Fund (UIF).
- 100% South African owned.
- Are adequately involved in the day-to-day operation and management of the business, with at least one or more of the members being full-time employees of the business, especially the main applicant.
- Prepared to participate in Business Development Support (BDS) and mentorship (pre and post).
- Commercially viable, sustainable, and feasible business idea.
3. Yes, there has been applications that were declined for funding for youth-owned businesses due to a number of specific reasons listed below:
- Incomplete applications.
- Adverse credit record.
- Application above the maximum funding threshold.
- Lack of off-take agreements.
- No identified market.
- Lack of financial statements for existing businesses.
- Commercial viability.
- Youth ownership not being clear.
- Non-compliance with industry regulatory requirements.
Letters of decline were sent to the applicants stating the reasons why their applications were declined or could not be processed further with some of the applications advised to contact the Small Enterprise Development Agency (Seda) for business support. The applicants are advised to re-apply once all the issues listed above are sorted. Some of the applications have been reallocated to the Township Rural Economic Programme (TREP) as it was relevant to them.