The Craft + Design Institute (CDI) is celebrating the close-out of a five-year R48.5m project, funded mainly by the National Treasury’s Jobs Fund, which enabled 50 SMMEs to create 669 new permanent jobs and fast-tracked 23 South African innovations.
The total project funding also included matched funding from the Technology Innovation Agency (an entity of the Department of Science and Innovation) through its Seed Fund Programme, the Western Cape Department of Economic Development and Tourism (DEDAT), the Michael & Susan Dell Foundation, and SMME contributions. The project was managed by CDI Capital, a niche emerging impact funder and subsidiary of the CDI non-profit organisation.
Named the CDI Innovation Project, the programme offered SMMEs bridging finance and working capital to purchase business inputs such as raw materials, product testing and key personnel during their business growth phase. It also offered mentoring and professional technical services, which supported the commercialisation of new products and services. Participating businesses have developed 23 innovations to date, many of which have won awards and attracted global investors.
The JF6 project, implemented from 2018-2023, exceeded all targets. It attracted 1094 applicants (target 120), created 669 new permanent jobs (target 600), and produced 741 trained beneficiaries (target 683).
“The SMMEs achieved these milestones despite the exceptionally difficult trading conditions of the Covid-19 pandemic and post-pandemic economic conditions, both local and global, the July 2021 unrest and persistent load-shedding,” said CDI Group CEO Erica Elk.
“The sustainability of the 669 new jobs will be monitored over the next two years. However, when one considers that earnings before interest, tax, depreciation and amortisation grew by R7m, a growth of 53% since the project inception, the outlook appears positive.”
Capital was disbursed to SMMEs through several funding vehicles: The CDI Growth Fund, CDI Design Innovation Seed Fund (DISF), working capital loans and a blended Covid-19 Relief Fund. These supported business growth and job creation through the entire idea-to-market and market-expansion business processes.
“The strategy of a blended mix of financing options – catalytic growth for jobs, working capital support and grants for pre-commercialisation innovation – has proven its veracity,” said Ryan Rode, Manager of CDI Capital.
Rode said the CDI Innovation Programme built on lessons learnt during an earlier CDI Jobs Fund project, implemented from 2012-2015, which created 464 new jobs. R14.5m was invested in 45 companies, helping these businesses to improve their products, processes and competitiveness, and expand into local and international markets.
Najwah Allie-Edries, Head of the Jobs Fund, said: “The Craft + Design Institute (CDI) has achieved outstanding results during their partnership with the Jobs Fund. They have clearly demonstrated that appropriately structured financial products combined with technical support are key factors when supporting innovation and SMME growth. In this they are aligned with the Jobs Fund in that as a Fund we believe that to support SMME growth and sustainability we must tailor the support to address specific needs and the support in the very least must comprise of a package which includes access to markets, technical support and finance.”
Vusi Skosana, TIA Acting Executive Innovation Enabling, said: “TIA has been in partnership with CDI to support innovation-based startups with funding to enable technology development and commercialisation through the DISF. We are proud to see the impact of the initiatives we supported contributing positively to solving national challenges and improving quality of lives of South Africans. Collaborations are vital to cultivating a culture of innovation. Through partnerships with institutions such as the CDI, we can identify, and support, start-ups that will change the course of South African enterprises. Innovations supported by TIA and its partners are a catalyst for economic growth, creation of enterprises, and thus job creation.”
“To affirm the role of TIA as an active funder, connector, facilitator, and enabler, it is important that the agency continues to collaborate with implementing partners who share our vision of a South Africa galvanised by a knowledge economy,” he added.
Thashlin Govender, Senior Director at the Michael & Susan Dell Foundation said: “We are humbled to have been part of this project which not only created permanent job opportunities for South Africans eager to enter the job market, but continues to support the development of innovations that create additional earning opportunities. The work of organisations like CDI, who are committed to making inroads in youth unemployment, are essential to creating lasting impact in our economy.”
Participant feedback
The businesses supported in the CDI Innovation Programme are diverse in size, sectors, products and services, and include 23 early-stage innovations that would normally not find it easy to access funds from traditional banks and funding agencies. The recipients had many favourable comments:
- Aegir Project Brewery, Noordhoek: “CDI funding allowed us to take our small, 25-seater tap room and turn it into a 350-seater business,” said owner Rory Lancellas. “It allowed us to become a viable business, create numerous jobs and really stabilise our future. This grant was a unique opportunity for us to grow organically, without jeopardising our ethos, brand or quality, something we are immensely proud of and thankful for.”
- NCC Environmental Services, Cape Town: “It’s clear that the CDI team understand the requirements of their funders. They like working with the enterprises and want the businesses to succeed. They are always available to answer questions and to guide you.”
- Tehilaa Golden Bag clothing factory, Thaba Nchu: “Through funding and mentorship, our sales turnover immediately grew by more than 60% and is continually growing. Our workforce increased from 55 to 103 permanent workers and 12 casuals. CDI was there for us before the Covid-19 pandemic and during the stress of the lockdown. Their actions and professionalism were always on time,” said founder Cherilyn Lucena.
- A Love Supreme décor and design, Cape Town: “Through the Growth Fund, we were able to access low interest finance which enabled us to take on three big export orders,” said founder Leanne Botha.
“The successful conclusion of this programme is a testament to the hard work put in by CDI staff and the SMMEs to ensure the funding achieved such an incredible impact,” added Elk.
“We believe that SMMEs are vital in growing our economy and creating jobs, and that with meaningful, socially responsible investment we can maximise the potential of local entrepreneurs, building a generation of South African innovators, and a strong, inclusive economy.”