Branson handed over a cheque of R100,000 to winners Musa Mapongwane and his business partner Amos Mtsolongo in Johannesburg on Tuesday.
The pair beat 51 other entrants in the competition.
Mapongwane explained that his business plan, which provides video game services, encourages children to stay off the streets.
"We have established seven containers [or centres] that house computers games, Playstations and other entertainment for the youth.
"We will be using the prize money to expand on equipment including DVD players as well as on marketing," said Mapongwane.
Mapongwane used personal loans from the bank to start up his business, which is already established under the name Starplex Gaming Zone.
The Branson School of Entrepreneurship, established in 2005 by one of the world's wealthiest people, entrepreneur Richard Branson, was set up to nurture a entrepreneurial spirit among it's pupils.
The entrepreneurial school provides specialised and accredited business administration degrees to students from disadvantaged backgrounds.
The winners of the competition said they simply identified a gap in the market which involved keeping youngsters entertained in a safe and controlled environment.
Their customers are charged at an hourly rate to make use of the entertainment facilities and 17 people have been employed to take care of the running of the business.
Regarding the school, Branson said: "It's always wonderful to be in a position where I can make a difference in the lives of people.
"Most schools don't even teach a student the basics about entrepreneurship, and it was our goal to give students hints to what exactly an entrepreneur is, and how to create a successful business that makes a difference in the community.
When asked what he regards as a good business plan, Branson said: "You would obviously start with an idea that is unique, you then surround yourself with good people.
"Attract some finance into your plans and it obviously helps if the press is interested in it. You then make sure you have fun doing it. Life is short so you might as well enjoy it.
"Ideally, do something that makes a difference, and getting kids off the streets will definitely make a difference."
The school is based at the Cida City Campus in the heart of the Johannesburg's city centre, and is South Africa's first virtually free tertiary institution.
The Virgin group, in its various capacities in South Africa including Virgin Mobile, Virgin Money and Virgin Active, employs some 8,000 people.
Article published courtesy of BuaNews
