Appraisal & Lending Process

INCA’s mandate allows it to fund fixed and movable assets of all entities within the statutory sector as well as private initiatives focused on augmenting services normally provided by the statutory sector. INCA's focus however remains on balance sheet funding to the municipal sector and its appraisal and lending process was tailored to the needs of municipalities, water boards and other utilities.

The appraisal process in INCA is underpinned by a credit model which focuses on all the major components impacting on the ability of the borrower to meet its commitments towards INCA. As part of the credit evaluation process, specific attention is given to:

• Financial viability;
• Management capacity;
• Economic sustainability;
• Socio-political conditions; and
• Environmental awareness

After specifically assessing the management capacity, economic future, current financial position and future prospects, with an emphasis on reliable free cash flows generated by the borrower, INCA provides a shadow rating to a borrower.

Based on the shadow rating of the borrower and the pure size of the free cash flows generated by the borrower, INCA approves a long-term and short-term credit facility available to borrowers. These facilities are annually reviewed and adjusted.

The INCA Credit Committee meets every second week to consider new applications for credit limits and to review existing limits. This enables INCA to maintain an average turn around time on funding requests of 21 days.

INCA provides fixed and/or floating rate finance for terms from 1 to 20 years. Transactions are concluded by way of standardised loan agreements (now in use for more than 6 years).

While most companies focus their attention solely on bottom-line results and shareholder wealth, INCA is also concerned about value added services. We therefore support our clients with advice and technical assistance to improve financial planning, budgeting and control, while the grant funding for capacity building is available from the INCA Capacity Building Fund.