JOHANNESBURG — The National Empowerment Fund (NEF) and the National Youth Development Agency (NYDA) have signed a partnership agreement establishing a R100 million National Youth Transformation Fund to support youth-owned businesses in South Africa.
The agreement was signed on Monday 14 September at the NYDA head office in Sunninghill by NEF Chief Executive Officer Mr Mziwabantu Dayimani and NYDA Chief Executive Officer Mr Ndumiso Kubheka.
Capital structure and funding terms
The fund has a planned lifespan of five years and combines capital from both institutions:
- NEF Commitment: R90 million provided primarily as repayable loans.
- NYDA Commitment: R10 million in seed capital allocated for enterprise development, investment readiness, grant support (primarily through assets), feasibility studies, certification, and incubation.
Financial support available to entrepreneurs includes NYDA grants and NEF loans with repayment terms of up to seven years. To assist emerging businesses, NEF loans feature a repayment grace period of up to six months, which extends to 12 months for businesses led by young women.
Eligibility and priority sectors
To qualify for funding, enterprises must meet specific criteria:
- Ownership: Businesses must be at least 50% plus one share youth-owned.
- Age Requirements: Youth shareholders must be aged 14 to 35 (with program collaboration covering individuals aged 18 to 35).
- Compliance & Management: Enterprises must be commercially viable, registered in South Africa, and tax compliant. Black individuals, as defined in the BB-BEE codes, must be actively involved at the board and management levels.
While all NEF-funded sectors are eligible, preference is given to the green economy, digital economy, aggregators, and natural and cultural beneficiation. Enterprises located in rural or economically depressed regions are strongly encouraged to apply.
Enterprise support and oversight
In addition to capital, the agreement incorporates non-financial support services. Beneficiaries can access business studies, compliance assistance, and certification through the NYDA Voucher Programme, alongside training, mentorship, and market placement through the NYDA’s Market Linkage programme.
Mr Makhanya described the agreement as a landmark commitment, noting that it connects young entrepreneurs who have the ambition to grow with the necessary capital and technical backing. NYDA CEO Mr Ndumiso Kubheka added that the fund creates a pathway for businesses that have received initial NYDA support to prepare for NEF growth financing and potential industrial expansion.
NEF Trustee Mr Mohammed Bhabha emphasized the necessity of supporting enterprises post-investment. He cited existing initiatives, including “Eggsellent by Lebo” in Kwaggafontein, Mpumalanga – founded by Ms Lebogang Mashigo, which operates a commercial egg-production facility with a capacity for 30,000 layer hens.
He also highlighted skills development programs such as the EastCape Academy (painting artisan training for 50 beneficiaries with increased monthly stipends), the City of Johannesburg Waste-to-Work Programme (210 beneficiaries), and the Altitude Group Contact Centre programme (50 young participants).
A joint steering committee with representatives from both the NEF and NYDA will oversee the fund, meeting at least quarterly to review funding pipelines and progress reports. NEF CEO Mr Mziwabantu Dayimani stated that management will focus on maintaining clear processes, keeping applicants informed, and tracking business progress to address operational challenges early.
How to Apply
Applications are submitted online via the NEF portal:
- Website: https://online.nefcorp.co.za/
- Toll-Free Phone: 0800 58 58 58
- WhatsApp: 064 758 5058
