Emma Okonji
Onafriq, a payment solution service provider, has announced its decision to wind down its agent banking business in Nigeria, operated as Baxi by Onafriq Nigeria Payments Limited.
The decision to shut down the business, according to the company, is not unconnected to Nigeria’s business environment, which has to do with the country’s operating landscape, including inflation and currency depreciation, which have affected trading volumes, operating costs, and the sustainability of the offline agent banking model.
Onafriq entered the Nigerian agent banking market in 2021 by acquiring the Baxi business (also known as Capricorn Digital Limited) and invested heavily through 2023 to strengthen and scale the agent network, an investment that reflected the group’s belief in agent banking’s role in expanding financial access and digitizing cash-based transactions.
The company however said trading conditions changed significantly from 2024, citing the depreciation of the Naira and broader macroeconomic pressures that dramatically changed the economics of the strategy.
The company, in a statement, also said the rapid growth of instant account-to-account payments simultaneously changed the mix of transactions at agents’ Point of Sales (PoS), adding that increased competition in this segment with associated margin compression added further pressure on the business.
“Following a review of its long-term strategy and the sustainability of the business, the group concluded that winding down the agent banking operation is the right course of action,” the statement said.
Founder and Chief Executive Officer of Onafriq, Dare Okoudjou, said: “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. 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.
“The closure will affect employees with roles connected to the agent banking business. Every affected employee will be consulted, treated fairly, and supported through the transition.
“Agents onboarded via the Baxi payments platform have been transitioned to another principal bank and we have asked our agents to transfer their funds to their preferred principal bank within 30 days. 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 statement said.
“The decision is confined to the 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. Onafriq remains committed to Nigeria and will focus on embedding these services in the Nigerian ecosystem,” the statement added.