Unemployed youth use stokvel payout to start business

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Statistics paint a dreary picture of youth unemployment on the eve of Youth Month, but some are finding ways to beat the odds writes Katlego Sekwati

After being plagued by unemployment for years, Nqobile Nkosi decided to join a stokvel with the hope of raising money to start his own business.

After months of investing in the scheme Nkosi, 25, received a R15,000 return on his investment which he used to start an upholstery business in the Limpopo village of Elandskraal. The village is located in the Ephraim Mogale municipality.

Together with Patrick Kgaphola, 24, and Joe Chisale, 28, they now run Mapholoba and Joe Upholstery.

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They specialise in manufacturing furniture from scratch, carpet cleaning and they also cover car seats and couches. The company started in September 2016.

Nkosi says he decided to start the business because he was unemployed and couldn’t find a job and wasn’t lucky in getting apprenticeships.

 “But when I started doing business it gave me hope that it’s not about working for someone. I can also create opportunities for other people,” says Nkosi.

The results of the quarterly labour force survey (QLFS) by Statistics SA for the first quarter of 2019 indicate that the official unemployment rate increased by 0.5 of a percentage point to 27.6 compared to the fourth quarter of 2018.

Stats SA says there are approximately 10.3-million unemployed persons aged between 15 and 24 years old in the first quarter of this year.

The authority also says between the fourth quarter of 2018 and the first quarter of this year, the percentage of youths aged 15-24 years who were not in employment, education or training increased by 2.1 percentage points to 33.2% (3.4-million).

Of the 20.3-million young people aged 15-34 years, 40.7% were not in employment, education and training (NEET).

Nkosi knew that starting a business was going to be challenging but it was a risk he was willing to take.

“I did not have enough money but I was motivated to take the risk since it is something I want and it will help feed me and my family,” says Nkosi.

He says the scourge of unemployment brought the trio together.

“A business comes with challenges. We were honest with ourselves coming into business that it might not be glamorous but we know the value of hard work and that encourages us to wake up every morning and head to work,” Nkosi says.

The venture was later fortunate to get partial funding from the National Youth Development Agency (NYDA). Nkosi received a cash injection of R50,000 from the NYDA which was established to take on the challenges faced by the youth.

“One must have a registered business [to qualify for funding]. You have to attend the business training or have any business training certificate. The NYDA will check if you meet the requirements, but it is not something that can happen over a few months. It took me three years to get the funding,” he says.’

When they started they encountered challenges in terms of the material needed to manufacture the furniture so they turned to family for assistance. Another challenge is that people do not pay on time so they are sometimes behind schedule in terms of manufacturing.

Nkosi says his wish is for the business to expand so that he can hire more people.

“There are only three of us who work here. We are short of hands but I cannot hire more people when the business is still so small. They will need to be paid and the budget does not cover that,” says Nkosi.

Their customers are independent people who previously had to travel long distances to have their furniture fixed or buy new ones.

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