Image above: Barrydale Hand Weavers
The third quarter of 2020/21 has so far been the best quarter yet for the CDI’s Growth Fund with 156 new employee contracts signed by the participating businesses.
In total there are 22 SMMEs on the Growth Fund who have created 391 new jobs, putting the project 35% ahead of its job target. The Fund has so far disbursed R8.5m in grants.
The CDI Growth Fund is a grant fund specifically for growing South African small businesses. The Growth Fund is managed by CDI Capital, which was incorporated as a CDI subsidiary in 2016 to catalyse funding for SMMEs. The Fund supports South African-owned businesses who operate within South Africa, who are at least more than a year old. The project aims to create a total of 600 new jobs by 2023.
In July last year the CDI was able to add an additional COVID-19 Relief Fund into the mix thanks to a grant from the Michael & Susan Dell foundation and an allocation from the National Treasury’s Jobs Fund. The relief package, designed by the CDI team, takes the form of grants and unsecured loans. The loan portion is interest-free, has a one-year payment holiday and is payable over two years. In addition we provide non-financial business and marketing support through webinars, mentorship and leadership development provided by expert advisors. We have also been able to provide business owners with business recovery, turnaround and growth specialist to aid them with their COVID-19 relief applications, cost reduction and turnaround/growth strategies.
By December 2020, CDI Capital had contracted COVID-19 Relief Funding for 16 SMMEs on the Growth Fund to the value of R7.8m including Market and Business support.
According to Ryan Rode, manager of CDI Capital, with the assistance of the expert advisors the project has been able to identify concerns and provide recommendations that could be implemented by the SMME.
“As at the end of Q3 2020/21, we have enabled over 2 600 mentorship hours for the business leaders focussed on leadership, marketing, strategy, and financial planning. The Market and Business support and mentorship has made a huge difference to the business owners involved at a very difficult time due to the pandemic, and no doubt has contributed to many of them sustaining the jobs they have in their companies and in some instances, even creating new jobs,” says Rode.
Cautious optimism for 2021/22
Rode says that, while the Growth Fund is pleased to report that it has exceeded its targets to date, it is acutely aware that the SMMEs are facing, and will continue to face, extreme challenges.
“With respect to the overall Jobs Fund project, CDI Capital has nine quarters left of the project to deliver the remaining 209 new jobs. Recruitment of suitable SMMEs in the continuing pandemic and into a post-COVID-19 economy – which is very hard to predict – is likely to be a complicated process. We are proceeding with caution but remaining optimistic.”
We spoke to CDI Growth Fund recipients to find out more about how they have taken steps to tackle the impact of COVID-19 and the value of the funding and support they have received:
Arron Bastable, Barrydale Hand Weavers:
“The whole team (23 staff members) here at Barrydale Hand Weavers are so grateful for the CDI Covid Relief Funding we have received since August 2020. It has enabled us to work efficiently through an exceptionally tough time. Personally, and as an owner / manager, it relieved so much stress from my life and weight from my shoulders. Prior to the funding I had to scrutinise our cash flow every day to ensure we could get through each week. However, with the funding in place everything changed as I had a guaranteed minimum income each month to pay our monthly costs such as rent, water, electricity, couriers, etc.
This gave me time to focus on marketing and sales, allowing me to launch our ecommerce site and develop bespoke ranges for key customers.
In turn this funding has allowed our business to not just survive but grow through the pandemic. Our turnover has increased 35% since last year, despite the harsh lockdown through April, May & June. This enabled us to increase wages in October and create five new jobs in 2020.
We are looking forward now to 2021 which has started very positively. We anticipate further growth in revenue and expect to create 3-5 additional jobs this year. We cannot thank the CDI and its partners and supporters enough, it has been so positive for our business, thank you.”
Linden Rhoda, NCC Environmental Services (Pty) Ltd
“NCC Environmental Services are extremely grateful for the partnership with CDI. Thanks to CDI soft loan, we were be able to comfortably pay salaries in Jan 2021 – this is normally our cash strap period due to slow cash collections as majority of our clients are returning from holiday. The second wave of COVID-19 infections impacted our operations and the grant we received from CDI contributed to putting the necessary steps in place to improve our staff safety, and to buy the required sanitizers and masks that were originally not budgeted for.
Thanks to the Grant and the Loan, we were able to offer more than 100 individuals permanent employment contracts, and we could purchase the required personal protective clothing, vehicles and equipment that goes with supplying wildland fire fighting services and Urban baboon management.”