Page 33 - IDC

CITY PRESS, 23 OCTOBER, 2016 7
business

Geoffrey Qhena,
IDC CEO

IDC to give R4.5bn

to boost youth

entrepreneurship

CAIPHUS KGOSANA
business@citypress.co.za

The Industrial Development Corporation (IDC) will be making available
R4.5 billion over the next three years to help tackle the “ticking time bomb”
that is youth unemployment.
IDC CEO Geoffrey Qhena has placed youth participation in the economy at
the centre of the development finance institution’s strategies and actions.
“What is urgently needed is a concerted, sustained effort to create an
environment that produces jobs, allows young people to acquire skills and
allows them to branch out on their own through entrepreneurship,” he said.
Speaking at the IDC National Youth Enterprise Conference, which took
place in Midrand on Tuesday and Wednesday, Qhena said the institution was
best placed to help fund youth-owned enterprises that create jobs as it had
more appetite for risk than the private commercial lending sector.
“It is no secret that access to funding is one of the major stumbling blocks
for new businesses. Because of the IDC’s mandate of stimulating the
economy, we are able to take a more patient approach and, within specific
funding schemes, offer preferential lending rates compared with commercial
banks,” he said.
Under the theme “Driving SA’s competitiveness through youth
entrepreneurship”, the conference was attended by young entrepreneurs that
have been funded by the IDC and those seeking opportunities to kick-start
their businesses. Speakers at the two-day indaba included Economic
Development Minister Ebrahim Patel; his deputy, Madala Masuku; IDC
chairperson Busi Mabuza; NEF divisional executive Setlakalane Molepo,
Telkom and Transnet CEO’s.
The IDC has pioneered the #SAUnder36 initiative through which it aims to
identify enterprises owned by those who are below the age of 36, that are
innovative, have the potential for high growth and can help stimulate the
economy and provide employment to young people.
Restless for success our success is measured by the success of the businesses that we fund,”
Restless for success
“Given our role as a development finance institution, we take these
businesses under our wing to ensure that they receive all the necessary
financial and nonfinancial support to help them achieve success. Ultimately,
said Qhena.
Patel told the conference that there were 3.5 million young people under
the age of 34 who live in townships and are ready to work, but there were
not opportunities available to them.
“If you focus on the townships you will find around 3.5 million young
people ready to work, available to work, keen to work but unable to find
work. That is the challenge that we are going to have to deal with. If we
formed ‘Unemployment Must Fall’, we would do well,” he said.
Patel said developed countries had recognised the importance of investing
in young entrepreneurs who are leading some of the fastest-growing sectors
of the world economy.
“The economy needs young people, maybe even more than young people
Manamele said these included: that it was a two-way street. entrepreneurs to make things happen for need the economy. When I meet with investors and travel the world, the
. A lack of clarity on how to access “What are we here for – to themselves. “Nobody owes you anything.” most exciting and fast-growing sectors of the economy are the ones led by
funding and the shifting of funding goal look at you and say: A number of speakers advised young people. Why should we deprive ourselves of that energy and that
posts; ‘We want to entrepreneurs to work at getting their capacity?”
. Too many forms to complete. The demonstrate how businesses investment-ready before Patel said contracts awarded by government through its infrastructure
queues were too long and there was much we love seeking funding. development programme for the upgrading of roads, bridges, dams, railway
not enough automation; you?’ No. We are Said Wijnberg: “As an entrepreneur lines and power stations stipulated that at least half the workforce on these
. Little or no feedback; here to trace it is important to understand that sites had to be young people. He said focus should be on channelling more
. The process was not whether there is there is a journey before you can young people towards technical and vocation education training colleges,
developmental; and anybody with become investment-ready. It is about where they will be able to acquire skills they can use to enter the workforce
. Government agencies did not solutions to our honing your own skills as an faster.
communicate with each other to current problems of entrepreneur. It is about getting other “When you are a plumber, your chances of getting a job are greater than
streamline and align processes to provide poverty, inequality and people to look at your business model very when you are a graduate in History or English,” said Patel.
better support to entrepreneurs. unemployment.” critically. To be sure: Do you have a market? Mabuza noted that IDC subsidiary – the Small Enterprise Finance Agency –
Manamela said young people who did Nomsa Ntlokwana The refrain “no one Catherine Wijnberg Is your business ready to go to the next had disbursed R1.3 billion in start-up and expansion funding to 69 000 small,
business with the state sometimes found owes you anything” level?” medium and micro enterprises. She said, however, that more needed to be
it to be a “poisoned chalice” because of delayed payments. came up in various discussions over the two days. Attendee Nomsa Ntlokwana (29), the owner of Dream to done to increase the number of young people entering the mainstream
“We are insisting … that any department or official who Said Catherine Wijnberg, director of small and medium Action hair salon and projects in Alberton in Gauteng, told economy.
does not comply [by failing to pay legitimate claims within enterprise specialist agency Fetola: “Just because you have the gathering she was “not yet ready for big money”. “The significance of support to the small business sector is that these are
30 days] should face the wrath of the law.” started a business and worked hard, it does not mean Instead, she was seeking nonfinancial support. the enterprises that have been shown to be significant job creation drivers.
While acknowledging concerns such as “techno- anyone owes you anything ... Your responsibility is to Ntlokwana said entrepreneurs should be willing to But funding alone is not a long-term solution to youth entrepreneurship
innovation phobia” and turnaround times, Deputy Minister make yourself understood.” support their own businesses. “If we always complain, we challenges. We need concrete solutions to bring millions of unemployed
of Economic Development Madala Masuku made it clear Entrepreneur Neo Malefane (30) encouraged his fellow are discouraging the people who are helping us.” young people into formal economy,” Mabuza said.

From humble beginnings
CAIPHUS KGOSANA innovators include the difficulties they experienced
One- business@citypress.co.za along the way. of sleeping in the kitchen
The third pillar is the “Funders” tool. It provides
There are three pillars to #SAUnder36, the online youth
platform spearheaded by the Industrial Development more information to young entrepreneurs regarding Kevin Kistan (pictured), CEO of Sacks Packaging, knows what it’s like to
the finance institutions and options available to those
Corporation (IDC). It serves as a one-stop shop for young needing start-up or expansion capital. These include live in abject poverty.
stop people seeking opportunities to enter the formal the National Empowerment Fund, the Small Enterprise Durban. He and his brother slept in the kitchen and wore torn clothes to
When he was young, his family lived in a small matchbox house in
Finance Agency, the National Treasury Jobs Fund, the
economy.
Mandla Mpangase, IDC public relations manager and
Kistan excelled in school and went on to qualify as a chartered
the brains behind #SAUnder36, presented the initiative to National Youth Development Agency and the school. But that did not deter him.
Technology Innovation Agency.
delegates attending the National Youth Entrepreneurship Using the “Ticking Boxes” tool, young accountant. By age 21 he was the financial manager of a large
portal Conference, held this week at Gallagher Estate in Midrand entrepreneurs can learn more about how to multinational company, and went on to start his own successful
construction business.
in Johannesburg.
register their businesses and comply with
tax and other legal requirements.
Young people who are keen to start businesses, but do
When packaging company Nampak got into trouble and
not know where to go for advice, can register on the The “How To Plan” option assists started disposing of some of its assets, Kistan and his business
partners put together a proposal to buy one of the lossmaking
#SAUnder36 web portal at saunder36.co.za. potential youth enterprises with divisions. With financial assistance from the IDC, they went on to
for keen innovative online assistance tools, called “Ideas Check”. how to negotiate deals, build country.
The first pillar to the portal comprises one of the most
writing a business plan as well as
turn the factory into the leading paper bag manufacturer in the
networks and market their
This tool enables aspiring entrepreneurs to post
information about themselves and their business idea to
“I’m certain that if you go into your pantry and turn over your
determine if it is viable. When using the tool they will be wares. sugar bag and flour bag you will see our logo,” he said.
Under “Networking” they get
young idea, the product or service they offer, who it is aimed at accessing new markets and Tiger Brands, Tongaat Hulett and Sasol.
tips on finding the best networks,
Sacks Packaging supplies to blue chip clients that include Sasko,
asked to provide their personal details, location, business
It has a 24 000m² undercover manufacturing facility in Durban and
and whether their company is registered.
meeting like-minded people.
There is also the “Opportunities” tool, which
Once they have filled in this information, an IDC
business development expert will respond and inform shares details on how big corporates are employs 300 people. It also has 26 apprentices that are being trained
in various skills.
guns about turning that idea into a profit-making enterprise. more information on business incubators, hours.
Kistan attributes his success to working hard and putting in long
helping young start-ups. Here they will find
them if their business idea is viable and how they can go
Under the “Think Business” tool – the second pillar –
“I work 15 hours a day. I understand the concept that I need to
enterprise development hubs and initiatives
budding young entrepreneurs can read the personal that encourages young entrepreneurs to stretch. Some say I’m not smart enough or I don’t know how to
testimonies of their peers, who have started their own cross all the hurdles that come with delegate. But I need to instil something in my staff and contractors.
successful businesses. In relating their achievements, these developing a successful business. They need to see something positive in their lives,” said Kistan.
– Caiphus Kgosana