Many South African citizens struggle to finance their education, pay their bills or secure enough funds to buy property; as such, the South African government realized this shortfall and and introduced a facility that enables South Africans to financially benefit from their government through the provision of grants.
Apart from that, the South African government is well aware of the significance of improving the economy, creating employment and attracting foreign investment. To make these goals a possible, the government structured grants and assistance programmes that can get its citizen’s businesses off the ground thus enabling growth.
What are grants?
Grants an award of funds from the government that does not need to be repaid, does not accrue interest, and has stringent guidelines for application. Government normally provide grants that are regularly tied in with its key deliverables such as black economic empowerment, job creation and developing the economy – to name some.
Unlike a loan, a grant is an award of money that should not be refunded and this means that there is no responsibility by the receiving parties to repay the money received. Though the South African government can be the best source of grants, its selection criteria is strict and paperwork intensive, and the receiving business is obliged to spend the funds in a manner specified by the provider. Most funds available in South Africa have their own specific requirements, so it’s advisable to research each fund carefully to assess their criteria and up your chances of receiving funding.
Worth noting is that the best place to begin researching government grants for business is through the Department of Trade and Industry (DTI). This can be done by simply visiting www.thedti.gov.za, or alternatively explore a number of funding options from grants to incentives and all their qualifying criteria. Below are some of the grants that are provided by the South African government:
Aqua-culture Development and Enhancement Programme (ADEP) – is offered to registered entities involved in primary, secondary and ancillary aquaculture projects for both marine and fresh water. It is approved for new, existing and upgrading entities.
Automotive Investment Scheme (AIS) – is designed to grow and develop the automotive industry through investment in new and replacement models and components that will increase production volumes, sustain and increase employment, and strengthen the automotive value chain.
Black Business Supplier Development Programme (BBSDP) – is a cost-sharing grant offered to black-owned businesses to improve their competitiveness and sustainability. It aims to fast-track small and micro-enterprises, foster links between black-owned businesses, corporates and public sector, and to complement affirmative procurement and outsourcing. It provides grants to a maximum of R1 million.
Business Process Services (BPS) – This scheme aims to attract investment and create employment in South Africa through off-shoring activities. It involves a three-year tax-exempt grant for qualifying businesses.
Capital Projects Feasibility Programme (CPFP) – is a cost-sharing grant contributing to the cost of feasibility studies for projects that will lead to increased local exports and motivate the local manufacturing sector.
Critical Infrastructure Programme (CIP) – is intended at cultivating the infrastructure of South Africa. The grant covers a minimum of 10% to a maximum of 30% of total development costs of qualifying infrastructure.
The Co-operative Incentive Scheme (CIS) – is a 90:10 cost-sharing grant for registered primary cop-operatives of five or more members to improve the viability and competitiveness.
Incubation Support Programme (ISP) – is intended to generate and develop effective enterprises with the ability to revitalize communities and local economies.
The Manufacturing Competitive Enhancement Programme (MCEP) – provides enhanced manufacturing support to encourage facility upgrades to sustain employment and improve productivity.
Manufacturing Investment Programme (MIP) – is a reimbursable cash grant to local and foreign-owned manufacturers who wish to create new facilities or expand on existing ones.
National Youth Development Agency (NYDA) – while it is moving away from grants for youth and going toward mentorship and development programmes, grants are available for youth entrepreneurs.
People-carrier Automotive Investment Scheme (P-AIS) – is a cash grant of between 20% and 35% of the value of qualifying investment in productive assets approved by the DTI.
The Sector Specific Assistance Scheme (SSAS) – is a cost-sharing grant offered on an 80:20 principle and a maximum of R1, 5 million is awarded to qualifying businesses.
Support Programme for Industrial Innovation (SPII) – aimed to stimulate technology development in South African industry.