UMSOBOMVU Youth Fund is cutting its base interest rates by 2.5 percent, effective from next month, in response to the global credit crisis.
The fund announced its new plans to assist small, medium and micro enterprises yesterday, but the Young Communist League dismissed the plans as “too little, too late”.
Buti Manamela, national secretary of the league, said: “They have been quiet all along, and now that the bill to dissolve them is passed, they come up with strange solutions. To us, this is just a meaningless exercise.”
The UYF said in September it would be merged with the National Youth Commission to form a new organisation, the National Youth Development Agency.
Malose Kekana, chief executive of the UYF, confirmed yesterday that the plans to merge the two organisations were going ahead.
He said the UYF’s programmes would continue under the new organisation, and the new budget request has been approved by the finance ministry.
The fund failed to secure the R400-million it had requested from the Treasury for the 2008-2009 financial year.
Kekana said: “A reduction in the base interest rates to 13 percent will improve the profitability, liquidity and solvency of many businesses.”
He said the interest rate cut will assist with cash flow and improve chances of surviving the adverse economic conditions.
“We are prone to defaulted payments because 70 percent of our loan book consists of high-risk borrowers. Our target market happens to be mainly unemployed youth with no financial security.”
The UYF also announced its new initiative called the Market Exchange Programme.
Twenty skilled professionals from the UK, who were retrenched as a result of the global meltdown, will be recruited to volunteer in South Africa to transfer skills.
Each of the professionals will be paired with two young South Africans for mentorship. About 40 South Africans will benefit.
Some of the interns will be recruited as part of the UYF’s annual internship programme.
Throughout the programme, the professionals and the interns will be operating from the UYF’s youth advisory centre.
The programme will start in March.
“With all these new developments, we are looking forward to 2009 and we hope to contribute even more to the development of our target market.
“In South Africa, it is difficult to recruit someone who is highly qualified and has financial and banking service experience for such programmes,” he said.
Some of the UYF’s achievements include training more than 200000 young people and getting about R2-billion from the private sector to boost its job-creation drive.
This includes R240-million from First National Bank, R100-million from Old Mutual, R25-million from business partners and from the public sector, including the expanded Public Works Programme. It has created more than 116000 jobs.