COVID-19 Project Overview
The COVID-19 pandemic is severely impacting small, medium, and micro-enterprises (SMMEs) throughout South Africa — a sector that employs 50-60 percent of the country’s workforce. The extended lockdown reduced the income of many SMMEs by more than 90%, forcing many business owners to cut positions to reduce costs and remain operational until the lockdown was lifted.
To help sustain these businesses and enable employees to continue earning livelihoods, the nonprofit Craft and Design Institute (CDI) established a COVID-19 relief fund with support from the South African government’s Jobs Fund. This initiative is providing specialized business services and funding to help retain employment for up to 550 low-income South Africans within CDI’s portfolio of SMMEs.
We have managed to secure enough work to break even and continue to employ and pay staff in full. Right now, due to COVID-19, 12 of the 13 staff are the sole income providers for their families, which is a huge responsibility.Wendren Setzer, The Wren Design
How it Helps
CDI supports creative South African entrepreneurs and small businesses in the craft, design, and light manufacturing industries. The institute helps its partners grow and create new permanent jobs through its Growth Fund project in collaboration with the government’s Jobs Fund.
When the South African government extended nationwide lockdowns to curb the spread of the coronavirus, the sales of many SMMEs plummeted, forcing companies to cut costs or close for good. This left many unskilled and semi-skilled workers either temporarily without work or in danger of losing their jobs altogether. So CDI stepped in with the help of the Jobs Fund to support businesses in new ways and stabilize employment
In response to multiple interviews with SMMEs, the nonprofit developed its COVID-19 relief support to assist SMMEs in two ways:
- Financial support: A hybrid of 30% grant and 70% interest-free loan product that covers up to six months of working capital and operational expenses.
- Business support services: Training and business advisory services to help business owners navigate challenges created by the pandemic. This includes digital marketing and strategy assistance as well as technical expertise for cash flow forecasting and recovery plan development.
- As of October 2020, CDI has reviewed and approved funding applications from 14 SMMEs which is helping retain over 500 existing jobs.
Relief Fund in Action: Essay Gifts
Beatrice Delpierre of Essay Gifts, a company supported through the CDI Growth Fund, shares about how the pandemic shifted her team’s work.
“COVID-19 had a big impact on my business and has been a threat to the existence of it. The biggest challenge was to manage cash flow to pay expenses, losing clients and getting raw materials. We had to find other income streams because there are currently no international conferences or events. We are also doing COVID-survival kits and are working on a ‘conference in a box’ option.”
Tailored Support That Safeguards Livelihoods
Because of the CDI team’s industry experience and deep understanding of challenges faced by SMMEs, they were able to quickly respond with a relief product that suits the varying needs of their partner businesses. The support provided will safeguard the jobs and livelihoods of people in South Africa who need it most.