Through the National Youth Development Agency (NYDA) Grant Programme, young entrepreneurs have the opportunity to start and grow sustainable businesses.
In 2013, the NYDA changed its youth enterprise funding model from a fixed interest loan structure to a micro-finances grant provision system. This means that you will not have to pay back the funding the agency provides you with.
Content in this guide
- How Does the Fund Work?
- Who Qualifies For NYDA Funding?
- NYDA Funding Exclusions
- What Is The Grant Approval Process And How Long Is The Lead Time?
- What Documentation Do I Need To Apply For NYDA Funding?
- Contact Details for NYDA Funding
NYDA partnered with Industrial Development Corporation (IDC) and the Small Enterprise Finance Agency to assist youth-owned businesses with funding and support over a period of five years. This R25 million grant programme offers both financial and non-financial support to qualifying young entrepreneurs between the ages of 18 and 35.
Only around 500 small to medium enterprises can expect to benefit from the financial portion of the NYDA Grant Programme per year. These businesses will consist of individual ventures and cooperatives. Additionally, many more can benefit from non-financial business support services including branding, marketing and website development.
Here you’ll find information on how to get funding from NYDA. However, do you have what it takes to run your own small to medium size enterprise? If you’re an individual or a group of young people who want to start or grow an existing business, then NYDA Grant Programme is the right funding for you.
How Does the Fund Work?
NYDA is an organisation established in 2008 to help address the problems facing South African youth such as skills development and unemployment. The NYDA plays a lead role in ensuring government, private sector and civil society make youth development a priority by identifying and implementing solutions to address youth development challenges. By empowering the youth and their businesses this entrepreneurship can improve job creation and help to elevate unemployment rates.
The NYDA is moving away from youth enterprise finance in the form of loans and more toward micro-finance grant provisions.
The grant provides both financial and non-financial support to youth entrepreneurs. Grants start from R1 000 to a maximum of R100 000 and support includes mentorship programmes, a voucher programme, market linkages, entrepreneurship development programme, youth co-operative development programme, and other business support services required.
The grant programme consists of two categories, specifically financial and non-financial business support services, which the entrepreneur needs to commit to for two years.
For young entrepreneurs seeking grants, grants are available for (and not limited to) motor mechanics and panel beaters, electricians, plumbers, domestic appliance repairs and services, hair dressers, cleaning companies, beauticians, small-scale recycling businesses, car washes and street vendors to name just a few.
The grant structure is in the following three levels, each focusing on a different type of youth enterprise, such as:
- Individual grants issues to formal and informal businesses that are in the start-up development phase of their business.
- Grants issued to co-operatives, meaning an autonomous association of people united to meet common economic and social goals through a jointly owned and democratically controlled enterprise.
- Another avenue is community development and facilitation projects.
For non-financial business support services, entrepreneurs will benefit with programmes including mentorship, market linkages, voucher programmes, entrepreneurship and youth cooperative development programmes.
Who Qualifies For NYDA Funding?
The following are the grant programmes qualifying criteria:
- You need to be at least 18 years old and no older than 35 years old.
- You’ll need the grant for business start-up or growth.
- You will need to have the necessary skills, experience or with the potential skills needed for your enterprise.
- You have to be a South African citizen and a resident within the borders of the country.
- You have to run the day-to-day operations and be management of the business.
- The grant that you require can’t be less than R1 000 and more than R100 000.
Here are the following thresholds that your business will need to fit into in order to qualify for the grant:
|Threshold 1||Survivalist Business||R1 000 – R10 000|
|Threshold 2||Start-up||R10 001 – R50 000|
|Threshold 3||Growth||R50 001 – R100 000|
- Your business will need to operate either informally or formally and should be a micro enterprise, such as street traders, vendors, emerging enterprises.
- Your business will need to strive towards making a profit and should be commercially viable and sustainable.
- The members of your business need to be 100% South African youth citizens.
- Your business operates within the borders of South Africa.
- Your business will need a bank account or the Agency will assist you to open one.
- If your business is a cooperative, the group must be a minimum of five people.
NYDA Funding Exclusions
Grants are not given to businesses that fall within illegal or ill-reputable activities like gambling, drugs, arms, sex trade. Included in the exclusions of the NYDA grant funding programme are enterprises which requires less than R1000 for funding, partial funding, co-funding or funding towards a deposit loan from another lending organisation.
Another factor to keep in mind is that business are ineligible if they have a contract or bridging finances, or have NYDA staff members or Board Committee Members or Members of the Accounting Authority that are part of management. If a staff member’s relative were to apply for funding, the staff member would have to recuse themselves from the pre and post approval process.
Additionally if your business falls within the gambling, gaming or sex industries, and/or operates illegal activities it is ineligible including:
- The sales of tobacco as the primary source of income.
- The sales of alcohol as the primary source of income.
- If your business is an investment trust or venture capital/private equity funds.
Your business will be ineligible if you require the funding to:
- Substitute an existing financier.
- Have NYDA issue a guarantee in favour of a third party.
- Become seed capital for research and development.
Your business will also be excluded if your shareholders/ members of your team lack contractual capacity because of:
- Being of unsound mind.
- Have a record for fraud or corruption.
- If you, as the owner, are an un-rehabilitated insolvent.
- If you, as the owner, are attending school other than tertiary.
- Pyramid sales schemes.
Equally important, NYDA won’t provide funding for a vehicle of any kind.
You will not be able to use NYDA funds for the following:
- To pay a bribe.
- Re-finances any of your existing loans.
- Any material purpose not declared in the application for grant or defined during the due diligence stage and detailed in the approved Terms & Conditions, unless where NYDA has supplied written approval.
- To settle overdue or outstanding South African Revenue Service liabilities, whether current on non-current.
However the grant may cover working capital, asset finance and stock purchases.
What Is The Grant Approval Process And How Long Is The Lead Time?
The Grant Officer will assist you to complete both the business plan and grant application form when you visit a NYDA office branch. Additionally, the Grant Officer will ensure that all your required supporting documentation is in place before the application reaches the Branch Manager. The Branch Manager will then review your file for compliance before submitting it to the Branch Grant Approval Committee. All documentation that you submit needs to be certified original copies, such as issued bank statements and not internet print-outs.
The lead time for any application for a young person to receive a response from the Branch Grant Approval Committee, whether favourable or not will be 21 days.
Please find any more frequently asked questions here.
What Documentation Do I Need To Apply For NYDA Funding?
Find your nearest NYDA branch office below and bring the following documentation with you to complete the application process:
- Business plan
- Business bank account or personal bank account latest statement (if you haven’t opened a business bank account)
- Proof of residence
- Certified copy of your ID
- Quotation from suppliers, with signatures and appropriate stamps.
Contact Details for NYDA Funding
- For more information on funding available visit www.nyda.gov.za.
- Call the call centre on 0800 52 52 52.
- Visit the nearest NYDA branch – visit here for a full list of NYDA branches and contact details.
Read next: How to Write a Funding Proposal