South Africa’s National Empowerment Fund (NEF) and National Youth Development Agency (NYDA) have committed R100 million to establish the National Youth Fund, seeking to expand access to finance and business support for young entrepreneurs facing barriers to starting and growing businesses.
The five-year partnership brings together R90 million from the NEF and R10 million from the NYDA, combining the two institutions’ financing and enterprise-development capabilities.
The agreement was signed at the NYDA’s head office in Sunninghill, Johannesburg and aims to create a more coordinated support pipeline for youth-owned businesses aged 18 to 35.
“This agreement commits R100 million to helping young people build businesses. Its significance lies in bringing our institutions together around the needs of entrepreneurs who have the ambition to grow but need finance and practical support to take the next step,” NYDA Executive Deputy Chairperson Bonga Makhanya said.
The fund will provide more than financing. The NYDA will provide grant support and enterprise development, while the NEF will bring investment assessment, loan finance and business support.
The partnership will also assist with investment readiness, feasibility studies, certification and incubation, with the NEF’s funding structured through repayable loans.
The institutions said funding decisions would remain subject to their respective investment and approval processes.
The initiative comes as access to capital remains a major constraint for young South African entrepreneurs, particularly businesses with limited assets, short operating histories and insufficient collateral.
Recent reporting on the agreement cited South Africa’s unemployment rate at 33.6% in the second quarter of 2026, while unemployment among people aged 15 to 34 was reported at 47.4%, underscoring the scale of the employment challenge facing young people.
The NYDA’s R10 million contribution will support enterprise development and investment readiness, including feasibility studies, certification and incubation.
NEF board member Mohammed Bhabha said the partnership was designed around the recognition that entrepreneurs need support beyond an initial injection of capital.
“Responsible investment requires a sound business case, but it also requires an understanding of what will help that business succeed after funding has been approved,” Bhabha said.
The approach is intended to move businesses towards investment readiness while helping funders assess whether enterprises have the systems and prospects needed to absorb further capital.
The NEF and NYDA said the fund would support businesses operating in a range of sectors, including manufacturing, infrastructure, renewable energy, the green economy, digital industries, agriculture and small and medium-sized enterprises.
The partnership is also intended to connect youth-owned businesses to markets and opportunities that can support expansion and job creation.
Bhabha pointed to the example of Eggcellent by Lebo in KwaMggafonttein, Mpumalanga, where entrepreneur Ms Lebogang Mashigo has built a commercial egg-production operation with capacity for about 30,000 layer hens.
According to the statement, the business has strong infrastructure, financial capacity and dependable customers, giving it potential to sustain existing employment and create additional jobs.
The NEF also highlighted its skills-development partnerships, including the EastCape Academy, which supported 50 beneficiaries through six months of training and living costs.
Some beneficiaries subsequently entered permanent employment, while others moved into self-employment.
Other programmes cited include the City of Johannesburg Waste-to-Work Programme, which supported 210 beneficiaries and the Altitude Group Contact Centre Programme, which provided 50 young people with workplace experience.
These programmes illustrate the broader model being pursued by the institutions combining skills, enterprise support, finance and market access rather than treating funding as a standalone intervention.
The National Youth Fund agreement will operate for five years, with the partners establishing a joint steering committee to monitor implementation, review funding pipelines and assess progress.
The partnership also allows the institutions to pursue additional funding from other partners, subject to written agreements.
NEF and NYDA said the objective was to build a pipeline of enterprises that can progress from early-stage support towards sustainable businesses capable of attracting further investment.
“The partnership provides for a steering committee with representatives from both institutions,” Bhabha said. “This should help the teams monitor progress, resolve difficulties and keep their respective responsibilities clear.”
NYDA CEO Ndumiso Kubheka has similarly described the initiative as an effort to move beyond fragmented interventions by combining funding with enterprise development, mentorship, market access and business support.
For South Africa’s young entrepreneurs, the test will now be whether the R100 million commitment can translate into businesses that survive beyond initial funding, attract additional investment and create sustainable employment.
“We must make the process clear, keep applicants informed and ensure that our teams follow through on their responsibilities. We must also pay attention to how businesses progress after receiving support, so that we can identify difficulties early and respond appropriately,” NYDA Chief Executive Officer Ndumiso Kubheka said.
