Non-bank lender Pepper Money has celebrated its 25th anniversary, thanking brokers for their central role in helping the non-bank originate $69 billion in loans.
Pepper Money celebrated its 25th anniversary at Machine Hall in Sydney on Wednesday night (17 September), reflecting on its journey over the past quarter century and the intrinsic role that brokers have played in building the business.
First launched in 2000, the non-bank started as challenger brand to help fund borrowers who found themselves outside of the banks’ credit policies, particularly the self-employed and non-prime customers.
The lender pioneered the ‘near-prime’ segment, providing a borrowing solution for home buyers who did not fulfil prime criteria, but did not warrant paying the higher rates of specialist loans.
Over the past 25 years, the lender also developed white label partnerships, now representing more than 40 per cent of flow, assisted over 65,000 self-employed customers through alternative documentation loans, and listed on the ASX twice (once in 2015 and again in 2021).
Over its history, Pepper Money has helped 570,000 customers access loans, including residential loans, asset finance and commercial mortgages, funded $69 billion in loans, and now has $20 billion in assets under management.
In the first half of this calendar year, the non-bank lender revealed total originations rose 38 per cent on the prior corresponding period, reaching $4.5 billion.
Speaking to The Adviser about Pepper’s growth over the past 25 years, CEO Mario Rehayem highlighted that Pepper’s journey has been built on the backs of brokers. Around 97 per cent of Pepper Money’s loans are originated from the broker channel.
He flagged that the lender works with more than 24,000 accredited brokers across the country to distribute its home loans, vehicle finance, and commercial lending.
“Even when we started 25 years ago, we were wholly and solely reliant on the broker market. That hasn’t changed,” Rehayem told The Adviser.
“We’re forever grateful for all the support. We could not have written $69 billion in 25 years without brokers. That’s all funnelled through them.”
Rehayem, a former broker himself, said the company’s longstanding willingness to listen to brokers has shaped many of its milestones.
“Brokers know better than anyone what customers need. That’s why we bring them into focus groups, product feedback and process design,” he said, stating that the feedback has led to product innovations and policy tweaks.
“When we sit down with our brokers, we know they have a wealth of knowledge. We may think we know what they need at the coal face, but we don’t pretend to know. So we bring them in to broker focus groups fairly frequently, and we unpack all the obstacles they may have in product. We ask whether they have customers that are not being served, or a process that needs to get more and more refined. Who better to guide us than the actual intermediary themselves? Because they’re the ones that are delivering it.
“So, brokers are educating us, they’re keeping us on our toes, and in turn we show our appreciation by building confidence for them – giving them products and solutions that make them look good to their clients.”
Rehayem noted that the tools and technology that Pepper has deployed over the years have been built to reduce complexity and boost broker confidence.
Pepper was the first non-bank to go fully live with NextGen’s ApplyOnline in 2006 and has since rolled out digital tools, including the Pepper Product Selector (PPS) and Resolve, and a credit cascading model that gives brokers multiple solutions from a single application.
Most recently, AltDoc Xpress has digitised the self-employed income declaration process, streamlining workflows for brokers, customers, and accountants.
“These innovations gave brokers confidence to recommend non-bank solutions by removing uncertainty and friction,” Rehayem said. “That’s been critical to our growth.”
The CEO added that even Pepper’s brand building has been designed with brokers in mind. Sponsorships and marketing campaigns – including those like the Wests Tigers sponsorship – have focused on consumer awareness, ensuring that when brokers recommend Pepper, customers already recognise and trust the brand.
“It’s about giving brokers confidence that when they place a customer with Pepper, it’s a name people know,” Rehayem explained.
Looking to the future
As Pepper enters its next chapter, Rehayem said the company’s vision is clear: continued reinvestment in technology and process improvement, coupled with an unwavering commitment to brokers.
The company’s X Factor program is currently reviewing every process and interaction to further enhance broker and customer experiences. At the same time, Pepper plans to expand into new product segments to meet more borrowers’ needs.
“The spark that started 25 years ago – finding the gaps and creating financial inclusion – still drives us today,” he said.
And while much may change in the next quarter century, Rehayem hopes Pepper’s relationship with brokers will remain its defining feature.
“Over the last 25 years, this brand has built a legacy of trust,” he said.
“That’s the most important thing for this business to go on for another 100 years.”
[Related: Prime lending fuels Pepper Money loan growth]
