At the fringe of Makati’s bustling business center stands the head office of Makati Finance Corp. (MFC), a consumer-finance company that has established a stronghold in the industry for over 40 years. It speaks of genuine service and immovable strength, successfully withstanding the trials and ordeals of time. Synonymous with its phenomenal growth and success is the lady who started it all: Teresita Boncan Benitez.

As founder and president of MFC, Benitez has always believed that integrity is the one driving force that will keep a consumer-finance company running. 

She recalls: “We started as Makati Investment and Financing Corp. in 1966, when our starting capital was only P200,000. Who would have known that the company will expand to what it is right now, a listed company with a market capitalization of P154 million?” 

The dramatic growth was spurred by the company’s vision, executed with genuine sincerity and commitment, of helping out people by providing financial assistance for their needs. Benitez recalls that at the time the credit card wasn’t as accessible as it is now. “It was hard to get a loan. Thus, MFC’s inspiration came from the idea of helping people save and buy whatever they need in a comfortable amount that they can repay at a much lesser cost.”

MFC began by financing for simple but practical items such as appliances and second-hand cars. The company grew as the average hardworking man realized he had another option.

In 2002 MFC became a publicly listed company. According to the Philippine Finance Association, MFC ranks as one of the top 30 financial institutions in the country out of an industry of more than 600.

Indefatigable

Not bad for a founder who refused to sit on her academic laurels after graduating with a degree of Bachelor in Arts Major in Mathematics from the San Francisco College of Women in the US.

Today the 73-year-old lady, who is also a director of MFC’s mother company Amalgamated Investment Bancorp., still goes to work early and comes home late hours after most employees had left for the day. Her exalted position does not restrain her from performing some clerical tasks, with only one assistant to help her.  Weekends are also usually spent working. 

 “There is no idle time with me,” Benitez explains her work ethic. “Even when I was studying abroad, I would find time to work during the hours when I didn’t have anything to do. Even during Christmas vacation, I worked full-time.”

That perseverance and dedication carried the company through the Philippine economy’s worst moments. The political turmoil of the early ’80s, an aftermath of then-President Ferdinand Marcos’s rapid decline of power, sent shock waves that adversely affected the company’s operations. To cope, MFC scaled down its loans and focused on collecting its receivables.

Tough calls

More than a decade later, in 1997, the industry again was hit by the Asian financial crisis. MFC, like all other finance companies, encountered loan defaults from its borrowers, which eventually led to losses. It was, according to Benitez, the biggest challenge the company had ever experienced.

She recalls: “We had a stockholders’ meeting where we asked ourselves, ‘Do we want to save ourselves, do we just collect, close and bite the bullet?’ At that time, we had approximately P160-million borrowings from banks—all clean loans, no collaterals.” That meant that, to save itself, the company could just declare bankruptcy and walk away from its borrowings. In the end, Benitez made a hard call, “I signed for it, I’ll stand by it.”

She paid all of MFC’s borrowings despite the painful loan defaults. True, the company paid a price, but up to this day, Benitez remains firm with her decision to do what was right. “Integrity is important, especially in this business. It’s not our way to do what is the easy way out,” she says. 

Interestingly, unlike most companies that folded during these two crises, MFC returned stronger by improving its risk management and control systems. That capability to make the tough call and stand by one’s principles, no matter how painful, is another reason why MFC is the bastion that supports the livelihoods of many people today.

Currently, MFC is focused on three loan products.  First, the company’s main loan product Rx Cashline are consumer loans given to medical professionals who need ample funds for medical-equipment purchase, building/redesigning of clinics, etc. This accounts for MFC’s approximately 90 percent of total net loan receivables in 2001. Being a “first mover” in this particular niche, MFC puts focus on this market because of its “sustained demand for consumption loans and its relatively lower credit risk due to medical professionals’ comparatively higher disposable incomes.” 

MFC’s second loan product involves the factoring of receivables. The company provides liquidity to small and medium enterprises by purchasing their trade receivables. The beneficiaries are small and medium service agencies who, by standard business practices, need 90 to 120 waiting days before getting their receivables from supplied companies. To keep their operations running without having to wait for an extended period of time, MFC advances a majority of their receivables. Once again, MFC goes back to its well-established roots of servicing the people, especially a part of the hard-working sector that may find it difficult to comply with the requirements of bigger financial institutions.

In 2005, MFC started financing motorcycle buyers through its MC Financing product. The loan product allows creditworthy individuals and small businesses to purchase motorcycles on installment at competitive rates. The company is aware of the advantages that personal mobility can provide hard-working individuals and businesses of all sizes. Motorcycles are increasingly becoming the vehicle of choice for low- to middle-class individuals as an alternative to public transportation.

“Business cannot be driven without a conscience or a sense of social responsibility,” Benitez explains her philosophy. “Enterprise exists to serve the community, thus entrepreneurship is always social in nature. The objective to gain profits will always be there, but in order to grow and be successful, one must always have a heart for the people, especially in assisting the underserved.”

While celebrating its 40th year, Benitez, not one to be complacent, chooses to look forward to MFC’s upcoming golden anniversary in 10 years’ time: “The best is still to come.”

Lending a hand

At the fringe of Makati’s bustling business center stands the head office of Makati Finance Corp. (MFC), a consumer-finance company that has established a stronghold in the industry for over 40 years.

Winning: A year of pushing hot buttons

About this time last year, we received an e-mail from a reader who asked if we believed America’s competitive success was linked to its relative lack of corruption.

INVESTOR BRIEFING

WATER is still flooding the basement of a shopping mall in the Philippines’ central business district after an explosion in October. At least nine died and more than a dozen businesses were kicked out from their glass-walled shops now wrapped with white-painted boards.

REDUCING POWER COSTS

The government of the Philippines plans to use state funds to address high power rates. Acknowledging it must do something about the rising cost of energy, the government announced that it intends to use more of the state’s gas royalties, National Power Corp. (Napocor) profits and Wholesale Electricity Spot Market (WESM) fees to reduce electricity charges.

RISING GDP

The Philippines’ robust economy continues to perform well, achieving a GDP growth of 6.6 percent in the third quarter of this year.

Brotherly love

Brother International Philippines believes competition makes business more exciting. And the company thinks there is still a space for one more player in the document-printing market in the country that can provide an alternative.

Winning: Breaking Through Bureaucracy

Q: How do you break through the bureaucracy that damages so many organizations? James Moss-Solomon, Bridgetown, Barbados                 

A: Damages? How about deadens?

PLAYING ALONG

TO many children, Elmo, the much-loved furry red monster from Sesame Street, is more than just a plaything. To children ages two to five years old, Elmo is a trusty playmate—a friend to lug around the playground; one who won’t complain when hugged, pinched or smothered with kisses. For parents, Elmo even makes a good teacher.

TOY TEST 2007

The holidays are just about here, and the toys are piling up in stores, waiting for you to make your list. Of course, even if your wish does come true, you have to hope for the best: That really great-sounding toy might be a piece of junk.

CONSUMER CONFIDENTIAL

This should be the time of year when Santa’s wholesale elves in the toy district in downtown Los Angeles are busy delivering cheap, Chinese-made playthings to consumers and retailers.

Lumads in the new world

It was a minifair compared with the grand bacchanalia that is the Kadayawan Festival that Davao City has come to be known for.

Mission: global customs service

Del Castillo: From what I have gathered, Commissioner Morales is a self-made man in this career; he supported himself through college while working at the Bureau of Customs as a utility man.

No run of the mill success

Management is a practical discipline measured by financial returns and competitive position. But it is easy to forget that success in business ultimately comes from a commitment to personal values. When you look at Metrobank today, the tendency is to focus on its results, its size and its position. It is easy to overlook the elements that shaped its character.

Winning: Private equity’s very public problems

Q: Why are so many private-equity deals blowing up? Alan Engle, Great Neck, New York                 

A: The short answer is that the world has changed (read: the US sub-prime-mortgage mess has erupted). A lot of companies that were once hell-bent on acquiring hot new properties suddenly want out of deals that are starting to look too cold for comfort.

A Queen Stumbles

HIS eyes stared upward as he started with that familiar tuneful articulation about Iloilo at the peak of its grandeur. A few minutes later, his voice turned wobbly as he recounted how the province slipped from prominence. “So we lost our label being the country’s Queen City of the South.”

Teacher’s pet

WHY am I passionate about Vietnam? Because Vietnam has proven to the world that it is possible to simultaneously achieve robust and sustained economic growth with equitable income distribution. 

Putting imagination to work

SOON after World War II, from 1941 to 1945, the Philippines experienced a decade of unprecedented growth in the 1950s, with Manila—despite being the most devastated city during the climactic battle era—slowly regaining its vigor to once again become a center of industrial progress.

Five steps to building your personal leadership brand

You have a personal leadership brand. But do you have the right one?

A leadership brand conveys your identity and distinctiveness as a leader. If you have the wrong leadership brand for the position you have or the position you want, then your work is not having the impact it could.

What Health Consumers Want

Consumers of health care constitute a market that is as diverse as a market can be, yet the idea that companies might profit by segmenting customers to address their varied needs seems almost foreign to the health industry, despite the billions of dollars at stake.

How Bayan got its voice back

Bayan Telecommunications’ Tunde Fafunwa is very enthusiastic nowadays because the Lopez-controlled company has risen from its low point. And the source of his excitement is largely due to the recent introduction of Span, Bayan’s wireless landline service.

Winning: Managing shooting stars

Q: How far should I go to keep a star performer who has an offer to work at a competitor? Hymie Betesh, New York                 

A: Not as far as you’re probably considering, we imagine, given the panic that strikes most managers when a star threatens to shoot out the door.

Lighting the way

Dutch electronics and lighting giant Philips Electronics has been continuously doing business in the Philippines for the past 50 years.

In the name of the people

THIS time around, former Navy officer and neophyte Sen. Antonio Trillanes IV left no room for ambiguity.

In his 2003 debut at the Oakwood mutiny, then-Lt. Senior Grade Trillanes hemmed and hawed about his intentions.

Water Is Life

FOR corporate do-gooders, corporate social responsibility (CSR) is just the start. The new trend among large and well-established corporate organizations is to integrate sustainable-development programs—not just mere philanthropic activities—to their core businesses.

Give your team a challenge they can’t resist

It’s not easy pulling a group of diverse individuals together to work as a team. Barriers abound in the form of fierce territoriality, incentive systems that reward individual rather than collective achievement, and mistrust spawned by an acquisition, merger or major internal restructuring.

Improve your return on returns

Competitive pressures have forced many retailers and manufacturers to liberalize their returns policies in recent years and gladly accept for a refund just about anything customers regret having bought.

A staged solution to the catch-22

Companies launching two-sided platforms—businesses that connect two groups of users, as credit-card companies do—have often subsidized one group to get it to use the platform. This is a risky approach, because it requires a big upfront investment.

Ship shape

For an employee, a company-sponsored overseas trip could mean mostly fun, with, of course, some work in between. For a chief executive of a company, however, it would be the opposite, and most of the time the fun part takes place in between working or not at all.

Winning: Stay the course…especially if it’s a new one

Q: Sometimes companies need to change even when there is not a crisis forcing the issue. In such cases, how do you keep your people excited about a change initiative after its newness has worn off? Trevor Smith, Singapore

A: You have to stay excited yourself. And not just excited, but obsessed.

If I had a hammer

HASHIM squinted before pulling the trigger. Although the 19-year-old is used to holding Soviet-made AK-47 assault rifles in the deep jungles of Mindanao three years back, this particularly weapon was new to him.

Big failure, little dreams

CASTELLANA, Negros Occidental—It is already past noon and yet Edelyn Pineda is still lazing around Sitio Odiong here along with her little friends.

The Morning Meeting: Best-practice communication for executive teams

Does your company’s executive team struggle with chronic communication problems and a lack of shared accountability? Many times when my colleagues and I are called in to help out an organization, we find that these two core issues underlie their problems.

Lessons from the leaders of retail loss prevention

Preventing theft, damage and errors such as food spoilage has long been an unyielding and poorly understood problem for retailers. But a few companies stand out in their ability to limit losses, and if every retailer were as successful as they are, the sector could save billions of dollars annually—as much as $27 billion in the United States alone.

The Jock Correlation in business

WITH many sports headlines today trumpeting organizational and solvency issues with various teams and sports associations across the world, there is often an almost missionary zeal to bring to sports a more “business approach.”

Winning: Developing a successful succession plan

Q: What companies would you hold up as examples of succession planning done right? Robert Handfield, Raleigh, North Carolina 

A: It’s sad to say, but your question would be a heck of a lot easier to answer if you had asked for examples of succession planning done wrong. That trend is gaining such ground these days it’s alarming.