How the Jobs Fund Works

Updated on 9 March 2020

The Jobs Fund is a government initiative that seeks to help create jobs by supporting initiatives that generate employment in innovative ways.

Well-known examples of local businesses that have received funding from the Jobs Fund include SweepSouth and Nova Pioneer.

SweepSouth, the on-demand home cleaning services company received funding from the Jobs Fund in 2014. Since then, SweepSouth has gone on to create thousands of job opportunities for women, the vast majority of whom were previously unemployed. In October 2019, Sweepsouth revealed to Business Insider that they had created over 15,000 domestic worker jobs since their launch in 2014.

Nova Pioneer is an independent school network. They received an R15-million debt investment from the Jobs Fund through the Vumela Fund in 2017. The group is helping to address the growing demand for private schools as the public education system continues to face challenges. The expected impact of this investment was the creation of over 500 direct new permanent jobs and capacity for 15,000 learners over the next five years.

[Update: The Jobs Fund does not provide grant funding directly to startups or small businesses, but rather provides grant funding to successful intermediaries which implement projects aimed at assisting small, medium and micro enterprises (SMEs) across the country.

The intermediary an SME would approach would depend on the type of assistance required (funding, incubation etc.), the model/requirements of the project as well as the sector the project operates in.

A list of most of the Jobs Fund enterprise development partners is available here.

Two examples of intermediaries are the Women’s Development Bank and the Small and Growing Business (SGB) Fund.

The Women’s Development Bank (WDB) Growth Fund

The WDB Growth Fund Enterprise and Supplier Development Programme saw the Jobs Fund approve a seed grant of R 40 million, in turn leveraging additional private funding of approximately R 60 million from WDB Growth Fund Pty (Ltd) in partnership with Seed Academy and WDB Investment Holding. Other investors included the Small Enterprise Finance Agency, SIOC Community Development Trust and Standard Bank.

The combined R100 million fund, known as the WDB Growth Fund (The Fund), is supporting 20 SMEs through equity investment, pre-investment, tailored and sector mentorship, and post-investment. The Fund is targeting SMEs in the retail, services, manufacturing, tourism, ICT, motor repairs, hospitality, secondary agriculture, fuel and textile sectors, assisting these SMEs with relevant market access.

The Small and Growing Business (SGB) Fund

In a similar on-lending programme, the Jobs Fund provided GroFin South Africa (Pty) Ltd, a 100% subsidiary of GroFin Managers, seed grant of approximately R 104 million. GroFin will use this grant to leverage approximately R 156 million in matched funding – composed of R 127 million from GroFin’s Small and Growing Business (SGB) Fund, R 18 million in GroFin’s own matched funds, and R 11 million in in-kind contributions.

The bulk of the finances will be used to provide loan financing to 42 SMEs.]

Below are answers to some of the Jobs Fund’s biggest FAQs.

1. Application process

The Jobs Fund considers proposals from municipalities, government departments, private sector and not-for-profit organisations. The Fund looks for innovative, scalable solutions for job creation.

The Jobs Fund has a two-stage online application process: the Concept Application Stage and the Full Business Application Stage. The application process begins when the Fund opens a funding round and issues a call for proposals. Applications are competitively assessed.

The decision to allocate grant funding is made by an independent investment committee.

According to the website:

– Applicants must demonstrate the ability to secure matched funding at a minimum matched funding ratio of 1:1. Projects that offer a higher matched funding ratio will receive preference;

– Projects will be given a maximum of three years (36 months) to implement and deliver the direct jobs promised;

– Applicants must be in full compliance with administrative requirements (including a valid tax clearance certificate or if expired the expiry date must not be older than six months);

– Applicants (contracting party) must be solvent, have been operating for more than two years, and have complete annual financial statements for the previous two financial years (these criteria apply specifically to the lead applicant);

– Implementers must have a verifiable track record of at least three years of technical experience in the area of interest.

2. Requirements entities must meet to qualify

All applications are reviewed against a set of eligibility and impact criteria. Grant funding is allocated on a competitive basis and organisations that have the ability to crowd in ecosystem support and leverage funding are assessed favourably.

The funding criteria is announced when a call for proposals is made, these include:

Ability to secure matched funding
Value for money
Sustainability
Innovation
Industry experience
Capacity to implement

3. Funding amounts

The minimum and maximum grant funding requests are set out for each specific funding round.

The minimum funding request is R10 million.

4. Additional benefits of the funding

• Jobs Fund as a catalytic agent in the market:

– Increasing the private and public sector’s capacity to intervene in the market (sharing the risk associated with innovative projects, i.e. without the Jobs Fund grant, these organisations would not have taken these ideas forward).

– The impact of the Jobs Fund grant as a funding instrument thus far has been greatest when the function of the grant is to reduce market perceptions of risk. In particular, as it pertains to perceptions of risk associated with SMME/SME funding.

– The Jobs Fund grant not only crowds in funding for SMEs it also encourages partners to provide an integrated support package to beneficiaries including affordable funding, business development support and skills transfer via structured training programmes and market access.

• Jobs Fund playing a capacity-building role in the market:

– Subsidising training and business development costs to enhance skills transfer.

Assisting Jobs Fund Partners to improve their monitoring, tracking & evaluation systems – institutionalising monitoring frameworks and a culture of measurement.

During their establishment phase, grant funding reduces the cost of doing business for SMEs providing them with an opportunity to grow and stabilise their business.

Through its support for creating enabling infrastructure such as SME/SMME incubation hubs, learning academies and technology platforms the Fund contributes to stimulating demand for labour as well as improving the supply of labour.

• Jobs Fund as an accelerator of labour market transitions:

– The facilitation of skills development and transfer has been achieved by the grant bridging the skills gap between unemployed youth in South Africa and the skills demand from employers in the market. Through its support for demand-led interventions, the Jobs Fund has supported skills development and matching to vacant jobs, accelerating the transition from education to employment.

In addition, the grant has been utilised to grow and enhance the technical capacity of SMMEs facilitating their path to commercial sustainability, bankability and access to commercial funds.

Get Weekly 5-Minutes Business Advice

Subscribe to receive actionable business tips and resources.