Banking Nigeria’s Real Economy: Union Bank’s Inclusion Push
“For decades, Nigeria’s banking system has served a familiar customer — salaried workers, corporate entities, and those with documented financial histories. But beyond that visible layer lies a far larger, vibrant economy powering markets, farms, and small enterprises — one that has long remained financially invisible. Now, a quiet transformation is underway as institutions like Union Bank of Nigeria begin to redesign banking itself to serve the economy that truly exists.”
“Nigeria’s informal and semi-formal sectors make up a significant share of economic activity, yet remain largely underserved by traditional banks due to rigid credit models.
Financial inclusion initiatives like Union Bank’s alpher are bridging this gap by offering tailored loans, cooperative-based underwriting, and accessible financial services to previously excluded entrepreneurs.”
There is a version of the Nigerian economy that the banking sector has historically served well.
It is the economy of salaried professionals, corporate treasurers, documented collateral, and predictable monthly income. It is structured, measurable, and compatible with conventional credit frameworks inherited from Nigeria’s colonial and post-independence financial architecture.
That economy matters. But it is not the only one.
There is another Nigeria — less documented, but more expansive. It is the economy of “the cooperative chairwoman in Ogun whose members contribute weekly,” the “textile trader in Balogun Market who turns inventory multiple times monthly without formal credit history,” and the “artisan in Aba whose most valuable assets are her workshop and reputation.”
This economy is not marginal. By most estimates, it is larger than the formal one — yet for decades, it has remained structurally underserved.
The gap is not driven by lack of intent but by design. Traditional banking products were built around a narrow customer profile: individuals with stable salaries, verifiable credit histories, and tangible collateral. Those outside this framework were not deliberately excluded — rather, “the system simply was not built for them.”
Recent data underscores the scale of this challenge. According to the Enhancing Financial Innovation & Access (EFInA) 2023 report, 26% of Nigerian adults remain financially excluded. Meanwhile, the World Bank consistently identifies access to finance as the leading constraint for SMEs, particularly within informal and semi-formal sectors.
These are not idle enterprises. They are productive businesses generating employment and economic value — operating within what can best be described as a financial blind spot.
A Shift in Banking Architecture
A small but growing number of institutions are beginning to close this gap — not by forcing customers into existing systems, but by redesigning the system itself.
Union Bank of Nigeria is one of such institutions.
Through its alpher proposition, the bank has developed financial solutions tailored to underserved segments. In a three-month period in 2025 alone, the initiative disbursed over ₦150 million in cash flow-based loans to entrepreneurs whose income streams operate outside traditional payroll systems.
Unlike conventional credit models, “alpher’s underwriting approach recognises cooperative structures, market associations, and informal cash flows” — realities that define how many Nigerian businesses operate.
Further impact includes:
Over ₦106 million in discounted credit extended to 71 businesses in market clusters
Financial literacy programmes reaching 230+ individuals
Support for 59 previously unbanked entrepreneurs through micro-grants and account opening
The significance lies not just in scale, but in strategy. It represents a deliberate institutional choice to “adapt products to people, rather than people to products.”
Inclusion Begins Within
Union Bank’s external inclusion efforts are reinforced by its internal structure. The bank’s board is 45% female, exceeding the Central Bank of Nigeria benchmark of 30%.
Under the leadership of Yetunde B. Oni, the institution continues to embed inclusive policies, including:
Five-month fully paid maternity leave
Ten-day paid paternity leave
Adoption and surrogacy leave policies
The CareCube crèche facility at its headquarters.
These are not symbolic measures. They represent “the internal architecture that enables broader product innovation and inclusive thinking.”
The Road Ahead for Nigerian Banking
Despite progress, significant gaps remain. The informal economy — arguably Nigeria’s largest economic segment — is still underserved, with limited access to affordable and scalable financial products.
Closing this gap will require a fundamental shift: “banks must design for the economy that exists, not the one they assumed.”
As Union Bank approaches its 109th year, its evolving approach reflects a deeper institutional realisation — that Nigeria’s economy is not monolithic. It spans cooperative networks in the North, trading ecosystems in the South-West, manufacturing hubs in the South-East, and digital enterprises emerging from Lagos.
The banks that recognise and build for this diversity will remain relevant. Those that do not risk becoming obsolete.
Nigeria’s real economy is already thriving. The question is whether its financial systems can keep up.
