Govt engages banks to fund youth projects
Pauline Dikuelo | Friday September 2, 2016 14:55
Speaking to BusinessWeek, Minister Thapelo Olopeng said they decided to engage local banks after realising that most of youth businesses fail because they do not deliver their projects on time due to lack of finance.
“We realised that most of the businesses have the capability to deliver their projects but do fail due to lack of finance which makes them to be unreliable and tend to tarnish their reputation,” said Olopeng.
He said that through this system, youth businesses could take the invoice to the bank, which will finance them to deliver the projects on time, and take the GPO as a collateral, which upon payment the bank will take what they are owed and transfer the balance into the business account.
“We have had discussions with a certain bank, presentations have been made and it’s only a matter of designing the model and then we will be ready to roll,” he added.
According to Olopeng this system will empower youth-owned companies and take them to greater heights while creating jobs in return as most of them fail due to lack of finance.
He further said his ministry had financed about 4,500 companies since inception in sectors like agriculture, manufacturing, ICT, services, to mention a few.
In addition, Olopeng said they have embarked on an exercise to evaluate these businesses with the aim of empowering them to grow, by monitoring and mentoring them where necessary.
“Through our assessment which is currently going on, we have realised that most of the businesses need to be nurtured while some are struggling with finance and access to markets,” Olopeng noted.
Late last year, the ministry also negotiated with the Public Procurement and Asset Disposal Board (PPADB) to start fast tracking the registration of youth-owned businesses which enabled youth to register their businesses and access government contracts in half the time and at half the price.
Through the agreement, company registration will be done in 14 days compared to the normal 30 days. The initiative, which targets young business people between ages of 18 and 35, seeks to encourage young people to play an active role in the economy and actively participate in public procurement and asset disposal.