The Craft and Design Institute (CDI) has secured R9.5m of COVID-19 relief funding for businesses it supports as part of its CDI Growth Fund.

The CDI Growth Fund is a grant fund specifically for growing South African small businesses who need a cash injection. The Growth Fund is managed by CDI Capital, which was incorporated as a CDI subsidiary in 2016 to catalyse funding for small and medium enterprises (SMEs). The initial funding was enabled through R19m in contributions by the National Treasury’s Jobs Fund, the Technology Innovation Agency (TIA), and the Western Cape Department of Economic Development and Tourism (DEDAT).

The Fund supports South African-owned businesses who operate within South Africa, who are at least a year old with turnover or assets above R1m. There are currently 22 businesses supported by the Growth Fund across South Africa who had created 197 new jobs before the impact of COVID-19. The project aims to create a total of 600 new jobs by 31 March 2022 and the COVID-19 relief fund will support the retention of 550 existing jobs currently under pressure within its portfolio of SMEs.

“Our Growth Fund COVID-19 relief augments the existing funding in place for these businesses – it is remedial support to help the SMEs that are part of this project, and will give them a boost to retain as many jobs as possible,” says Ryan Rode, manager of CDI Capital.

Rode adds that “the COVID-19 pandemic is presenting a significant challenge to our SMEs on the project, as is the case with businesses in general locally and globally. This relief funding will go a long way to assist with the retention of the new jobs already created and the existing jobs within these SMEs.”

The CDI Growth Fund’s COVID-19 relief takes the form of grants and unsecured loans. SMEs applying for the facility will be assigned to a financial consultant who will assist them to apply for any relief mechanisms they have not yet applied to. Consultants will also explore cost reduction measures and assist with cash flow planning and applications for funding. SMEs will also need to submit a recovery action plan, and this too will be a one-on-one facilitated process with a business advisor. The loan portion will be interest-free, have a one-year payment holiday and is payable over two years.

The funding consists of R6.4m made available by National Treasury’s Jobs Fund, and additional funds from the Michael & Susan Dell Foundation. The Dell Foundation has also contributed to ensuring further market access, training, and business support services are made available to the project’s SMEs.

“Realising the gravity of the social and economic impact of COVID-19, the Jobs Fund was compelled to put up its hand and respond by implementing its COVID-19 support intervention to help mitigate the disruptions the pandemic has on its projects. Ensuring the resilience of SMEs will strengthen their position as key contributors to South Africa’s inclusive economic growth trajectory,” says Najwah Allie-Edries, Head of the Jobs Fund.

Erica Elk, Group CEO of the CDI, expressed her thanks to the National Treasury’s Jobs Fund and the Dell Foundation for the support.

“We have seen the deep and severe impact of COVID-19 across our economy and we face the likelihood that many more South Africans will find themselves unemployed in the coming months ahead. The businesses we support through the CDI Growth Fund are all SMEs who have proven themselves as sustainable job creators; they are all run exceptionally well and represent important emerging engines in the economy that must be nurtured. We are very thankful for the continued support of the Jobs Fund, which has been with us on this journey to grow SMEs for many years; and we are very excited and grateful for the support from the Dell Foundation. It is only through working together that we will navigate our country and the world through this unprecedented crisis.”