For decades, Nigeria’s banking sector has effectively served a familiar segment of the economy – salaried workers, corporate organisations, and individuals with structured income, verifiable collateral, and clear credit histories.
This system, rooted in traditional financial models inherited over time, continues to function well for those who fit its design.
However, a much larger and often overlooked segment of the Nigerian economy operates outside these structures. This includes cooperative groups pooling weekly contributions, market traders with rapid inventory turnover but no formal credit records, seasonal agro-dealers, and skilled artisans whose businesses thrive on reputation rather than documented assets.
These enterprises are not small or insignificant. In fact, they represent a major share of Nigeria’s economic activity. Yet, they remain underserved – not because banks intentionally exclude them, but because traditional financial products were never designed to meet their needs.
Data supports this reality. The 2023 EFInA report reveals that 26 percent of Nigerian adults are still financially excluded. Similarly, the World Bank consistently identifies limited access to finance as the biggest challenge facing small and medium-sized enterprises, especially those in informal and semi-formal sectors.
Recognising this gap, a few forward-thinking institutions are beginning to rethink their approach. One such example is Union Bank of Nigeria, which is developing financial solutions tailored to underserved markets.
Through its alpher initiative, the bank has introduced innovative lending models that align with the realities of informal businesses. In just three months in 2025, over ₦150 million in cash flow loans were disbursed to entrepreneurs. These loans were designed using alternative underwriting methods that consider cooperative structures and market-based income flows instead of traditional payroll systems.
Additionally, Union Bank extended more than ₦106 million in discounted credit to 71 businesses within previously unbanked market clusters. Financial literacy programmes under the initiative have also impacted over 230 individuals, while 59 entrepreneurs received micro-grants and gained access to formal banking services.
What stands out is not just the scale of these interventions, but the strategy behind them. Rather than forcing customers to adapt to existing banking systems, the bank is redesigning its products to reflect how people actually earn and manage money.
This external commitment to inclusion is supported by an internal culture that prioritises diversity. Women make up 45 percent of the bank’s board, surpassing regulatory benchmarks. Under the leadership of Managing Director and CEO, Yetunde B. Oni, the organisation continues to invest in inclusive policies such as extended maternity and paternity leave, adoption benefits, and workplace childcare facilities.
These internal structures help shape broader thinking and innovation, enabling the bank to better serve a diverse customer base.
Despite these efforts, there is still significant progress to be made across the banking sector. Informal and semi-formal businesses remain largely underserved, with limited access to affordable and widely distributed financial products.
To bridge this gap, more institutions must adopt a similar mindset – building systems that reflect Nigeria’s real economic landscape rather than relying solely on outdated models.
As Union Bank marks over a century of operations, its evolving focus on financial inclusion highlights a key truth: the future of banking in Nigeria depends on how well institutions adapt to the diversity of the economy.
From cooperative networks in the North to trading hubs in the South West, manufacturing clusters in the South East, and digital enterprises in Lagos, Nigeria’s economy is vast and varied. Financial institutions that recognise and respond to this diversity will remain relevant in the years ahead.
Union Bank has taken a step in that direction. The journey toward full financial inclusion continues.
