Gro-E Youth Scheme

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Gro-e youth

Scheme

OBJECTIVES

One of IDC’s objectives, through the GRO-E Youth Scheme, is to encourage youth entrepreneurship and employment creation, thereby growing South Africa’s economy.

Gro-E Youth Scheme Qualifying Criteria

  • Available to South Africans and permanent residents up to and inclusive of the age of 35 years at the time of final approval;
  • Youth shareholding should be at least 26%;
  • Youth operational involvement in the business;
  • Applicant can be a start-up or expansion within South Africa;
  • Cost per job of up to R800 000 for the duration of funding – calculated using total project cost;
  • Applicant to meet the BBBEE requirements of the IDC – level 4 or have a plan to achieve this within 24 months; and
  • Own contribution will be determined by the financial capacity of the entrepreneur and the cash flow profile of the business.

Gro-E Youth Scheme Instruments and Pricing

  • Equity, quasi equity and loans;
  • Minimum of R1 million and Maximum of R50 million per transaction;
  • Pricing to apply as follows:
    • More than 26% Youth Owned – Prime less 2%; Equity – 6% RATIRR; and
    • More than 50% Youth Owned – Prime less 3%; Equity – 5% RATIRR.
      Discounted equity pricing only applicable for the youth equity portion
  • First draw must occur within 1 year from approval of funding by the IDC or pricing reverts to normal IDC pricing; and
  • Standard IDC fees apply.

YOUTH PIPELINE DEVELOPMENT PROGRAMME

OBJECTIVES

To improve the readiness of potential applicants and thereby increase their probability for IDC consideration.

Qualifying Criteria

  • Available to youth-owned businesses (irrespective of whether it qualifies for Gro-E Youth or not);
  • Application must meet IDC sector and funding limits;
  • Applicant can be start-up or expansion;
  • Pre-investment support
    • Proposal must pass a readiness assessment and in-principle go-ahead from sector SBU Head;
    • To bring an application to bankable stage, including detailed marketing studies, mentoring, technical assessments, sourcing and negotiating with suitable suppliers, costing of products, QS costings, EIAs etc.); and
    • Up to a 6% of the potential investment amount up to a maximum of R500,000
  • Post approval assistance:
    • Pre implementation – for assistance required in meeting/ clearing of CPs (must be specific and be supported by cost estimates, with clear milestones with regards to objectives and skills transfer);
    • Implementation – for in depth mentoring and coaching as well as any other business support required for up to 2 years; and
    • Up to 40% of the investment amount or a maximum of R1.5 million.
  • Interventions provided during pre-BA and pre-implementation stages must not take more than 6 months to be completed.

Instruments and Pricing

  • Loans and grants (50:50); and
  • Prime; repayable after IDC’s normal debt, subordinated in terms of cash-flow and security.

OTHER

SCHEMES