Donor funding from institutions such as the World Bank and the Industrial Development Corporation (IDC) has been granted to a number of local companies, including many IT businesses, through Innovation Management Consulting (IMC).
Desmond Piaray, IMC director, says most local companies are unaware they may qualify for donor funding.
"Grant funding applies from a company`s inception to divestment; a number of funds exist which can be used to reduce the weighted average cost of capital in any stage of a company`s lifecycle," says Piaray.
While there are obviously strict criteria placed on a company`s ability to qualify for donor funding, Piaray says IMC has never yet made an application that has been turned down.
IMC makes the application for a company in return for a percentage of the grant secured. "If we don`t secure the grant, we don`t get paid; that is incentive enough for us," says Piaray.
NetsurIT recently secured a World Bank 50% cost-sharing grant with a total expenditure value of R1.2 million, brokered by IMC.
The Competitiveness Fund is a Department of Trade and Industry incentive with World Bank funding and was awarded to netsuriIT for its company enhancement strategy which focuses on infrastructure growth and intellectual capital investment.
Forward planning is required as Piaray explains donor funding must be applied for before the commencement of a project, although it is re-reimbursed retroactively.
In terms of Department of Trade and Industry expectations, activities that are implemented must contribute towards revenue generation and improve company profitability.
"We have already started implementing our enhancement strategy and from our activity analysis, we project a further 20% increase on our forecast profitability for this financial year," says netsurIT MD, Orrin Klopper.
Other IT companies that have used IMC`s services include Altron subsidiary Powertech, technology developer Inala and software developer NeuralAct.
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