Fintech firm Onafriq to close Nigeria agent banking business

Fintech firm Onafriq Nigeria Payments Limited has announced it will wind down its Nigerian agent banking business, Baxi, and refocus on pan-African payments.

In a statement on Friday, the company cited macroeconomic headwinds such as inflation and currency depreciation as key factors affecting trading volumes and operating costs and undermining the sustainability of its offline agent banking model.

South Africa-based Onafriq, with a footprint in Morocco, Mali, Kenya, and Tanzania among others, entered the Nigerian agent banking market in 2021 when it acquired the Baxi business (also known as Capricorn Digital Limited) and invested heavily through 2023 to strengthen and scale its agent network.

Operating conditions changed significantly for the firm beginning in 2024, with a sharp depreciation of the naira and broader macroeconomic pressures dramatically impacting its operations.

A rapid growth of instant account-to-account payments simultaneously changed the mix of transactions at agents’ POS.

According to Onafriq, increased competition in this segment, coupled with associated margin compression, further strained the business.

After reviewing its long-term strategy and the business’s sustainability, the group concluded that winding down the agent banking operation is the way to go.

“We entered Nigeria with conviction and commitment, but did not achieve the outcome we set out for. Closing this business was a difficult decision to arrive at, one that affects colleagues, agents, and business partners across Nigeria who poured their hearts and soul into building out the Baxi network,” Dare Okoudjou, founder and CEO of Onafriq, said

“We are committed to honesty, fairness, and a well-managed transition for everyone impacted. Nigeria remains central to our mission, and we will continue to serve the market as a Payment Solution Service Provider through the Onafriq payments network and our card issuing services,” he added.

The closure will only affect employees whose roles are connected to the agent banking business. The company said every affected employee will be consulted, treated fairly, and supported through the transition.

Onafriq said agents onboarded via the Baxi payments platform have been transitioned to another principal bank, and it has asked them to transfer their funds to their preferred principal bank within 30 days.

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“Onafriq’s teams are available to provide support and guidance throughout the process. The company will continue to honour its commitments to affected stakeholders and communicate openly during the transition,” the company said.

It added that the decision affects only its agent banking business in Nigeria and does not represent an exit from the Nigerian market.

“Onafriq Group remains strong, with continued growth across its cross-border payments network and card issuing services,” it said.