Onafriq to Wind Down Baxi Agent Banking Operations in Nigeria

Onafriq is winding down Baxi, its Nigerian agent banking business, after five years, while retaining operations in the country as a Payment Solution Service Provider.

The company said the decision followed a review of the business’s long-term strategy and sustainability. Onafriq attributed the move to inflation, the depreciation of the naira, rising operating expenses, lower transaction volumes, pressure on margins and the rapid expansion of instant account-to-account payments.

Agents given 30 days to move funds

Baxi agents have been transitioned to another principal bank and have been given 30 days to move their funds to their preferred principal bank, according to Onafriq. The company did not identify the receiving bank in its announcement.

The wind-down will also affect employees whose roles are connected to the agent banking operation. Onafriq did not disclose how many employees would be affected, but said it would consult them and provide support during the transition.

The company also said it would continue to honour its commitments to agents and other stakeholders involved in the Baxi network.

Onafriq to continue Nigerian operations

Onafriq said the decision is limited to agent banking and does not amount to a withdrawal from Nigeria. Its continuing activities will focus on its payments network and card-issuing services.

“This decision is confined to the agent banking business in Nigeria and does not represent an exit from the Nigerian market,” the company said. Onafriq added that its wider group remains strong, with continued growth across its cross-border payments network and card-issuing services.

Dare Okoudjou, Onafriq’s founder and chief executive officer, said the company had entered Nigeria with strong expectations but had not achieved its intended results.

“We entered Nigeria with conviction and commitment, but did not achieve the outcome we set out for,” Okoudjou said.

He described the decision as difficult because it affected colleagues, agents and business partners who had contributed to building the Baxi network.

Shift in Nigeria’s payments market

Onafriq entered Nigeria’s agent banking market through its acquisition of Capricorn Digital in a deal announced in October 2021. At the time, Baxi had more than 90,000 agents and had processed transactions worth more than $1.6 billion in 2021.

The network provided cash-in and cash-out services, account opening, money transfers, bill payments and other financial services. Onafriq’s plan was to connect Nigeria’s offline payments ecosystem with MFS Africa’s cross-border payments infrastructure.

However, payment behaviour changed as instant account-to-account transfers became more widespread. During the first half of 2024, Internet transfers in Nigeria reached 11.6 billion, compared with 6.3 billion PoS payments.

Competition from Moniepoint, OPay and PalmPay also grew in the country’s PoS agent-banking market. Onafriq’s decision comes amid a broader pullback by some fintech companies from Nigeria’s financial services sector. Chimoney ceased operations in May after struggling to raise sufficient capital, while Gigbanc announced in July that it would wind down its business amid a difficult fundraising environment.

Onafriq operates across 40 African countries. The company said its Nigerian transition would not change its broader focus on cross-border payments and card services.