YES aims to grow SME sector through zero fee initiative

To stimulate the small & medium enterprise (SME) sector – rightfully referred to as the backbone of the South African economy – the Youth Employment Service (YES) is running a campaign that will allow eligible small businesses to join the YES programme at no cost.

SMEs contribute 40% toward the country’s gross domestic product, but according to the Small Business Institute (SBI), the number of SMEs providing formal employment consists of just over 250 000 businesses. And while formal SMEs are most businesses, they only provide 28% of jobs.

“The SBI has found that internationally, this figure should be closer to 60% or 70%,” says YES CEO, Ravi Naidoo. We need to strengthen our SME sector as a crucial part of creating more jobs and combating unemployment.”

SMEs have the potential to create 90% of the new jobs in South Africa, according to the National Planning Commission. “We want to do what we can to help SMEs to place youth in their businesses which will, in turn, expose these young people to entrepreneurship with all its possibilities, and the SME sector more broadly, as well as giving SMEs a boost to their human resources.”

For the first 100 SMEs to apply, YES will for the first time waive all its fees, namely its registration fees, and its monitoring and evaluation fees. This means qualifying small businesses interested in joining the YES programme only need to pay the salaries of the young people they take on and will still receive all the YES benefits.

YES already subsidises costs for SMEs that participate in the programme. However, with the support of larger businesses, YES is offering zero fees (not including youth’s salaries) for the first 100 small businesses that respond to this campaign and commit to employing youth. This will also boost these businesses’ BBBEE levels.

YES’s registration fees range from R100 for EMEs to R2 500 for QSEs, and the M&E fee ranges from R1 600 per youth to R3 000 per youth, depending on a business’s net profit after tax, as well as its turnover. Even though YES is the lowest-cost employment programme in South Africa, it is evident that even minimal costs can be a barrier to many promising SMEs.

“Just over half of the jobs in South Africa – 56% – are provided by just 1 000 larger employers, which includes government,” says Naidoo. “It is vital that we build the job creation capacity of our SMEs, both for their sakes and for the sake of our young people who bear the brunt of the country’s unemployment crisis.”

He adds that YES believes the SME sector has a great deal to offer youth beyond simple upskilling. “They will see firsthand the kind of grit, courage and resilience required to be an entrepreneur and learn some of the ins and outs of owning and running a business right at the coalface. We look forward to signing up these 100 businesses, and seeing the difference they can make.”