Gro-E Youth Scheme

Who should apply for funding?

• Start-up businesses, including funding for buildings, machinery, and working capital;
• Existing businesses for expansionary purposes;
• Businesses with greater than 25% ownership by persons under the age of 36;
• Businesses that demonstrate economic merit and have prospects of acceptable profitability to be able to service their obligation;
• For the duration of the funding period, businesses whose maximum cost per job does not exceed R500 000 relative to the total funding required;
• Enterprise Broad-Based Black Economic Empowerment certification from an accredited verification agency, where applicable;
• Businesses operating or expanding in South Africa;
• The funding period will be structured to meet the cash flow needs of the business;
• Appropriate capital and interest payment holidays will be applied depending on the financial needs of the business;
• Available to South Africans and permanent residents; and
• Applications must meet IDC sector and funding requirements.

How does the scheme work?

• Funding will be made available at an interest rate of up to prime minus 3% to businesses that create jobs;
• A minimum of R1 million with a maximum of R50 million per project will be allowed;
• The funding is available over five years or until the Scheme is exhausted, whichever occurs first;
• The first draw must be within one year from the approval of funding. If not, pricing reverts to normal IDC pricing;
• Reduced loan pricing will be available for five years, after which normal IDC pricing will apply; and
• Finance required in excess of the scheme’s limit can be accessed through normal IDC funding.

What sectors does the IDC fund?

In line with Government’s New Growth Path (NGP) and Industrial Policy Action Plan (IPAP2), businesses in the following sectors will be considered for funding.

Media and motion pictures:

• Media pictures production;
• Media value chain – broadcasting (radio and television);
• Media expansion – including new media;
• Music value chain; and
• Film production and animation.

IDC Youth Pipeline Development Programme, offering pre and post-investment business support, aimed at:

• Supporting youth applications to become investment ready;
• Assisting with meeting and satisfying conditions precedent;
• Ensuring the businesses’ long term sustainability; and
• IDC’s business support programme offers non-financial support to entrepreneurs. The support is available during pre- and post-approval stages, including assistance to distressed clients.
• 50% of the business support is offered as a grant and the balance is recovered as a sub ordinated loan.

The Industrial Development Corporation (IDC) has set-up the Gro-e-Youth Scheme to offer financial and non-financial support to youth enterprises that contribute towards the creation of jobs and growing South Africa’s economy.

The IDC has committed itself to funding youth-empowered and youth-owned enterprises to the value of R4.5 billion over 5 years. The Gro-e-Youth Scheme provides loans at an interest rate of up to prime minus 3% and a Real After-Tax Internal Rate of Returns (RATIRR) of 6% equity. In a highly competitive business environment, this is a key advantage for any young entrepreneur to have.

The funding is available to businesses that operate in industries that are in line with IDC’s mandate and have the potential to create jobs. The Gro-e-Youth Scheme is available to South African citizens or permanent residents and the minimum amount for finance is R1 million.

*Terms and conditions apply:

• The funding period will be structured to meet the cash flow needs of the business
• Appropriate capital and interest payment holidays will be applied, depending on the financial needs of the business
• There is no prescribed minimum for owner contribution. This will be determined by the financial capacity of the entrepreneur and the cash flow profile of the business.