Inca believes there are about 30 more municipalities that could qualify for loans and plans to expand its client base.

In addition, the company is expanding its range of products to access other markets. Other statutory organisations like water boards and parks boards are proving a viable business area.

Johan Kruger, MD of Inca, says the company is the largest private-sector funder of the statutory sector.

"This gives us a good position in the market. We are planning to leverage off this favourable status by developing new products that meet the changing needs of our clients and through diversifying geographically," Kruger says.

The company is engaging in asset-backed finance and some discounting in order to cater for shorter-term municipal funding needs. As part of this process, and to protect Inca, a holding company is being formed with Inca as a 100% subsidiary. This will ensure that Inca is ring-fenced financially and legally so that investors are protected from any negative effect that might flow from the new ventures.

As part of the process of geographic diversification, Inca has started a consulting company called Inca Initiative.

"The new company focuses exclusively outside SA's borders. The firm provides expertise to assist statutory bodies outside SA. It is a prelude to the creation of Inca Africa, which will be a funding vehicle in the rest of Africa.

"The consultancy gives us the opportunity to help organisations throughout Africa put their financial houses in order, and will provide us with valuable insight when Inca Africa becomes operational. Inca Initiative provides a good foundation from which Inca Africa can build," says Kruger.

He says Inca takes the view that funding for basic infrastructure in Africa should not be made via dollar or other hard-currency loans, as it leaves borrowers exposed to potential exchangerate volatility.

In many of the countries the balance of payments is under almost constant threat.

However, these countries do have internal savings potential.

"There is no bridge to pool these funds and make them available for public-sector capital expenditure. We will seek to raise funds in each of these markets so that the money can be lent for the development of infrastructure in these countries," Kruger says.

He says Inca has followed a similar model in SA, with about 80% of its funds originating in SA and the balance through offshore funding. The company has been careful not to involve itself in currency speculation, and all its offshore borrowings are hedged.

A key element in ensuring that its future plans take place is a shareholder imperative that it becomes an empowerment or black-owned company.

"Our own SA market makes this essential and our plans to expand into the rest of Africa adds greater impetus," Kruger says.

Inca is engaged in discussions with interested empowerment parties and is hoping a deal will be concluded in the near future.