MTF Finance

MTF Finance provides secured lending on motor vehicles and approved plant and equipment to consumers and small businesses. It launched unsecured personal lending in late 2021. Like existing lending, unsecured personal lending occurs under a full-recourse or “originator guaranteed” business model.

The business operates from 52 franchise offices, from Kerikeri in the far north to Invercargill in the deep south, and the network continues to grow. This provides borrowers with an easy point of contact for private or business loan origination.

Being local businesses themselves, the individual offices have a unique understanding of the local economies and communities in which they live and work. MTF Finance also originates through a network of vehicle dealerships, also subject to the full-recourse business model.

For much of MTF Finance’s history, the business was a cooperative, owned by loan originators. Although MTF Finance transitioned to an investor-owned company in 2009, it retains many aspects of the cooperative model, with shareholding a requirement for all active franchises and vehicle dealerships. Along with the recourse business model, this ownership structure creates a powerful incentive for originators to lend responsibly and provide a market-leading level of service to borrowers.

First listed on the NZDX in 1994, MTF Finance has a well-established brand and reputation as a supplier of finance and as a capital market issuer, regularly issuing ABS transactions to institutional investors in New Zealand and Australia.

MTF Finance has a long history in securitisation, beginning in 1995 with a euro commercial paper programme that was replaced with a rated warehouse in 2010. In 2012, the business issued the first asset-backed securitisation in New Zealand since the financial crisis, and it has been a regular issuer since.

The importance and value of securitisation as a funding source is ingrained in the organisation. Loans are originated with the goal of creating a portfolio that will be attractive for investors, with ongoing reporting provided to each originator against key metrics in line with funding parameters, all contributing to an overall “ledger quality score”.

Securitisation funding is supported by a corporate banking facility, perpetual preference shares listed on the NZDX and shareholder equity.

MTF Finance is a stable and profitable business. Primary avenues of growth will come from expansion of the franchise network and introduction of new products.

Asset performance is strong, with recourse arrangements taking effect shortly after two months of a borrower being overdue; the business reports gross loss data at 61 days past due. The impact of the originator guarantee, along with recoveries on the underlying security, means net losses are almost nonexistent.

Exceptional performance is also driven by a two-level credit assessment, where each originator is assessed and regularly reassessed by the credit team at support office, and each originator assesses the credit risk of each borrower.

Fraser Wilson
Head of Treasury and Funding
+64 3 742 6439
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Kyle Cameron
Deputy CEO
+64 3 474 6373
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www.mtffinance.co.nz