Question NW135 to the Minister of Small Business Development
18 March 2024 - NW135
Luthuli, Mr BN to ask the Minister of Small Business Development
(1)With reference to her reply to question 4157 on 8 January 2024 regarding mechanisms in place to encourage and make provisions for youth entrepreneurship and addressing youth unemployment, wherein she mentioned that the Youth Challenge Fund had approved loans to the value of R227 798 265 to 66 youth-owned businesses and that it had disbursed a total of R150 348 036 to 42 youth-owned businesses, what (a) are the full, relevant details, including names and locations, of the (i) 66 and (ii) 42 youth-owned businesses that received loans and/or other funds and (b) total amount did each specified business receive; (2) what are the full, relevant details of how her department intends to recoup the loans?”
Reply:
I have been advised that:
1. At the time of consolidating the response to the Parliamentary question 4157, funding applications for 66 youth-owned businesses were approved and funding was disbursed to 42 youth-owned businesses. Since the data is captured on a live system, as of 19 February 2024 71 youth-owned businesses have been approved for funding to the tune of to the tune of R228 730 052,79, and 44 youth-owned businesses received funding to the tune of R152 597 677,84 as per the attached spreadsheet.
2. The fund is implemented by the Small Enterprise Finance Agency (sefa) on behalf of the Department of Small Business Development (DSBD), then sefa processes are followed to approve and disburse the funds to eligible applicants. The approval of applications takes place at the Credit Committee level, once approved, the contracting (legal process) takes place between sefa Officials and the client and then the loans are disbursed. After disbursements, the client’s file is handed over to the Post Investment Monitoring (PIM) Department. In the case of equipment or machinery purchase, when the supplier delivers, the Investment Officer (IO) or the PIM official are present at the client’s premises to verify that the goods are being delivered as per the paid invoice. Within thirty days post the disbursement, PIM conducts client visits to ensure that the business continues to function in line with what was agreed upon and approved by the Credit Committee. When the loan repayments are due, PIM raises instalments, through the Collections Department, and collects payments from clients’ accounts via the debit orders.