The lost Aussies: 3.6 million locked out of the financial system

Posted 12-07-2017


  • 54 per cent of Aussies don't know where to go when they're turned down for a loan
  • 26 per cent of Aussies turned down by a bank are self-employed or work part-time
  • 42 per cent feel their main financial institution doesn't understand their needs 

Research released by Pepper Money, reveals a large group of Australians being under serviced by banks and potentially getting lost in the financial system.

The lost Aussies
The research results found that 3.6 million (18 per cent) of Aussies have been turned down for a loan by a financial institution and more than half (54 per cent) of those turned down for a loan were unaware that there was another option.¹ As a result, a large proportion of Australians are being locked out of the financial system, unable to access the support they need to meet their financial goals.

Mario Rehayem, Managing Director, Australian Mortgages and Personal Loans, at Pepper Money said: “Many financial institutions have an automated, set criteria for loan applications and the number of Aussies being excluded from this criteria continues to grow. This means that many Australians who need financial support - for a house, a car, children’s education – are not receiving it,” he said.

Recognising this gap, Pepper Money’s loan assessment team looks at every Australian’s situation individually and aims to help all Aussies succeed.

“Over 90 per cent of Pepper Money’s home loan applications are conditionally approved because we take a different approach to assessing Aussies. We have an assessor look at the whole picture of an individual’s circumstance to understand their real life.”

The downside of the gig economy
Over a quarter (26 per cent) of the Aussies that were turned down for a loan were refused because they were either self-employed or work part time, highlighting the limitations of the current system.

“Australians have always been an entrepreneurial nation, last year we saw a 2.4 per cent increase in new actively trading businesses compared to 2015. In the last ten years we have also seen a growth in the gig economy. We know that part-time and self-employed is a choice, not a red flag - there are 2.4 million self employed Australians.² We understand that every Australian is different and we want to help them succeed, no matter what their situation,” said Mr Rehayem.

Demand for trust
The research also finds that 42 per cent of Australians do not feel their financial institution understands their needs and financial goals; feeling their main financial institution is focused on business profits, rather than customer service. 63 per cent of Aussies revealed that they withhold information from their main financial institution and one in ten are concerned about having all of their information in one place.

“There is a clear disconnect between Australians and the financial institutions that operate to ‘serve them’, leading to a significant group of Australians being underserviced and potentially getting lost in the system. At Pepper Money, we want Aussies to feel like they can be honest with us to ensure they receive the best loan possible to suit their needs,” Mr Rehayem said.

When asked what the biggest problem with their main financial institution is, Australians responded ranking fees and profits first, followed by their main financial institution not understanding their real life situation and being out of touch with real customers.

“There is a clear demand for a trusted lender that can be flexible around consumer’s real-life situations. With the current state of the housing market and a national affordability crisis, there has never been a greater need for a financial provider like Pepper Money who understands the importance of considering the needs and wants of Aussies.”

“We want Aussies to challenge the accepted and to follow their dreams. And we genuinely want to help consumers on this journey,” Mr Rehayem said.

If you need help with a loan, you can always find someone to give you one-on-one help at Pepper Money. Just give us a call on 13 73 77 and tell us about your situation. The more we learn, the better we can help.

¹ Pepper Money (2017). The Lost Aussies: 3.6 million locked out of the financial system. A Research Report. Pureprofile research, Sydney Australia, 2017
² http://www.civilsociety.org.au/smallbusiness.htm

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For Media enquiries, please contact DEC PR on behalf of Pepper Group: 02 8014 5036 | pepper@decpr.com.au