JOHANNESBURG, Jan 15 (Reuters Life!) - British entrepreneur Richard Branson on Tuesday said South Africans could help ease poverty by setting up small businesses.

Speaking at his Branson School of Entrepreneurship in Johannesburg, which is designed to turn young black students into businessmen, he said innovation could help South Africa cure its social ills.

"It's wonderful to be in a position where we can make a difference," Branson told students after he awarded the winner of a business competition in the Soweto township.

Millions of black South Africans live in grim townships on the sidelines of an economic boom after decades of apartheid.

He called on South Africa's government to help establish small businesses.

"There should be no red tape where there are small businesses," he said. (Reporting by Serena Chaudhry; Editing by Ibon Villelabeitia)