Onafriq shuts down its Nigerian agent banking business after five years
Baxi was one of Onafriq's large bets on Nigeria's offline payments economy, built around the idea that a vast network of agents could bring financial services to customers who still relied heavily on cash.
Onafriq, a digital payments network operating in 40 African countries, is ending its Nigerian agent banking business, Baxi, after five years, citing a reevaluation of its long-term strategy and sustainability. The company attributed the decision to factors such as inflation, naira depreciation, increased operating costs, reduced transaction volumes, and pressure on margins, as well as the swift rise of instant account-to-account payments.
Baxi was initially a large investment for Onafriq, aiming to provide financial services to a cash-dependent population through a vast agent network. However, the economic situation in Nigeria made maintaining the network increasingly challenging. "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," said Onafriq's CEO, Dare Okoudjou.
Employees tied to the business will be affected, though the company did not disclose the exact number. Baxi agents have been transferred to another principal bank and must migrate their funds within 30 days. Onafriq will continue to operate in Nigeria as a Payment Solution Service Provider, focusing on its payment network and card issuing services.
In 2024, Nigeria's naira lost approximately 129% of its value, and the country's inflation rate reached 34.8% in December 2024. When Onafriq entered the Nigerian market in 2021, Baxi had over 90,000 agents and processed more than $1.6 billion in transactions by the end of that year. The acquisition aimed to link Nigeria's offline payments ecosystem to MFS Africa's cross-border payments infrastructure.
The shift towards instant account-to-account transfers and increased competition from fintechs like Moniepoint, OPay, and PalmPay diminished the relevance of Baxi's offline agent banking model. Onafriq will consult affected employees and help them during the transition, while honoring commitments to agents and other stakeholders.
This decision to exit agent banking is specific to Nigeria and does not signify an end to Onafriq's presence in the Nigerian market. The company remains focused on growth in cross-border payments and card issuing services.
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