The human factor.
From the get-go of his now 18-month tenure at the helm of MTF Finance, chief executive Chris Lamers believed the Dunedin-founded company had the ability to provide customers with personal service, whether through a phone call or an office visit, and the ability for that staff member to make a decision.
The old-fashioned value of customer service might not be rocket science, but the approach has paid off for the company, which has notched up a raft of achievements this year, including a 40% increase in lending growth and 38% rise in profitability, growing its reach of franchises, winning the excellence in marketing category at The Grand Business South Award and being awarded the 2023 KangaNews New Zealand Securitisation Deal of the Year.
Mr Lamers described 2023 as a "watershed" year for MTF Finance; a year where the company had shown the potential of a "great business model" and it had been able to help more New Zealanders because it was so close to its customers. Within a difficult environment, it had been able to do more "rather than retreat behind digital algorithms and iPhone apps".
The increase in the number of franchises and a "dramatic" increase in customers all came back to understanding the customer and what they needed, he believed.
Established in 1970 as a way for motor vehicle dealers to write loans for their customers, MTF Finance, first listed on the NZDX in 1994, is both a Dunedin and New Zealand success story.
In November, it announced net profit after tax of $11.6 million for the 12 months to September 30, up 38% on the previous year. Lending assets increased by 32% to $1.010 billion. Underlying profit after tax increased by 71% to $11.3m with total lender earnings up 27% to $85.5m.
Its community-based lending model, in which MTF Finance franchises and vehicle dealers make the lending decision, recorded record low arrears at less than half the industry average.
Lending was up 40% year-on-year to $846m, up from $607m the previous year, and it added more franchises around the country to bring the total to more than 50. MTF Finance had also invested heavily in better technology to help provide the service customers wanted, Mr Lamers said.
While some people looked at finance as "just a loan", for many, it was a big decision in their lives and enabled them to do something life-changing, whether that was buying a car, renovating a house or, for migrants, bringing family to New Zealand.
At a time when banks were pulling back on branches, the ability for a local to make a decision, or to have someone answer the phone and be able to help, made a big difference.
Being close to the community, helping customers and providing great service was more important than worrying about margins. "We found this year, if you do that, everything else follows."
While it was a great year financially, that was never the target. He cited one of Nike’s 10 principles — "if we do the right things we'll make money damn near automatic".
There were a lot of people who were not getting what they wanted from their existing finance providers, and one thing that people learned during Covid-19 was the need for help when things went wrong.
It had been quite a tough year from a regulation standpoint, but the great thing about MTF Finance was it had the ability to adjust to change quickly, which not every company did, he said.
MTF Finance was a great business which had been built out of some very talented people in Dunedin, and he believed there was more of a role the company could play in the city. It was a proud Dunedin company and it could still do more in Dunedin while continuing to grow its brand nationally, he said.
While vehicles were still 85% of the company’s work, Mr Lamers wanted MTF Finance to been seen as a viable alternative to banks, not just a vehicle lender. There were still "massive" opportunities in that vehicle dealer channel. The company was also launching the brokering of home loans through its franchise network.
The wider MTF Finance team had worked very hard over the year and was also proud of the year the business had. Across its network — people working in franchises and national office staff — there was a team of 350 and they were all excited about the opportunities it had. The board also saw "unlimited potential" for the business.
While it was easy to get caught up in the day-to-day work, hearing customers’ stories would often produce a realisation of just how the business was making a difference to people, he said.
Mr Lamers was also driven by a belief the finance sector in New Zealand did not service people particularly well.
He did not think it was as innovative as in other countries, which he attributed to a a combination of regulations, the smallness of the country and a host of other issues.
"It’s invigorating to see how we can fill that gap," he said.
Having joined the business in mid-2022, Mr Lamers, who divides his time between Auckland and Dunedin, said he felt like he was "just starting".
MTF Finance was also keen to work with other Dunedin businesses to tell "the Dunedin story".
"I just genuinely think Dunedin should be proud of this business, as it should lots of businesses."
