Onafriq, a major African financial technology company, has announced the closure of its Baxi agent banking business in Nigeria, citing rising operating costs, persistent inflation, naira depreciation and intensifying competition in the digital payments sector.
The shutdown affects Onafriq Nigeria Payments Limited, which operates the Baxi payment services platform used by agents to provide financial services to customers, particularly in underserved communities.
The development highlights the growing challenges facing Nigeria’s fintech industry as economic pressures and changing consumer payment habits continue to reshape the agent banking market.
Why Onafriq Is Shutting Down Baxi in Nigeria
Onafriq attributed the decision to worsening economic conditions that significantly reduced the commercial viability of its agent banking operations.
The company entered Nigeria’s agent banking market in 2021 after acquiring Capricorn Digital Limited, the operator of Baxi. It subsequently invested in expanding the platform’s agent network through 2023.
However, conditions became increasingly difficult in 2024 as the depreciation of the naira, persistent inflation and rising operating expenses put pressure on profitability.
According to a report by ThisDay, Onafriq also identified the rapid adoption of instant bank-to-bank transfers as a factor changing transaction patterns at point-of-sale (PoS) outlets.
As more customers embraced digital transfers, competition intensified and profit margins for traditional agent banking operations came under further pressure.
Following a comprehensive strategic review, Onafriq concluded that discontinuing the Baxi agent banking business was the most sustainable option.
Onafriq CEO Speaks on Baxi Shutdown
Onafriq founder and Chief Executive Officer, Dare Okoudjou, described the decision to close the business as painful, acknowledging its impact on employees, agents and business partners.
“We entered Nigeria with conviction and commitment, but did not achieve the outcome we set out for,” Okoudjou said.
The CEO said the company remained committed to treating affected stakeholders fairly and ensuring an orderly transition.
Okoudjou also reaffirmed the company’s confidence in Nigeria’s financial services market despite the outcome of its investment in agent banking.
The closure represents a significant change in Onafriq’s Nigerian operations after several years of investment in the Baxi platform and its network of financial service agents.
Baxi Agents Given 30 Days to Transfer Funds
As part of the transition arrangements, Onafriq said agents operating through the Baxi payments platform had been transitioned to another principal bank.
Affected agents have been instructed to transfer their funds to their preferred principal bank within 30 days.
The company said its support teams would remain available to assist agents throughout the transition process and provide guidance where necessary.
The shutdown will also affect employees whose roles are directly connected to the discontinued business.
Onafriq pledged to consult affected workers, provide appropriate support and fulfil its commitments during the winding-down process.
The transition arrangements are intended to help minimise disruption for agents and other stakeholders affected by the closure.
Onafriq Says It Is Not Leaving Nigeria
Despite shutting down Baxi’s agent banking operations, Onafriq stressed that it was not withdrawing entirely from Nigeria.
The company said it would continue providing payment services through its wider African payments network and card-issuing operations.
It also maintained that Nigeria remained strategically important to its long-term growth plans.
The distinction means the closure is focused on the agent banking business rather than a complete exit from the Nigerian market.
Nevertheless, the decision underscores the pressure on fintech companies to reassess their business models as operating expenses increase, competition grows and customers increasingly adopt alternative digital payment channels.
Nigeria’s Agent Banking Industry Faces Growing Pressure
Onafriq’s decision highlights the challenges confronting Nigeria’s agent banking industry, which has helped extend access to financial services beyond traditional bank branches.
PoS agents play an important role in enabling cash withdrawals, deposits, transfers and other transactions, particularly in communities with limited access to conventional banking infrastructure.
However, operators must balance transaction volumes against expenses such as technology, staffing, agent support and other operating costs.
The growing use of instant bank transfers has also changed how customers make payments, potentially reducing demand for some services traditionally handled by PoS agents.
For fintech operators, these changes have increased the importance of sustainable pricing, efficient operations and business models that can withstand economic volatility.
The Baxi shutdown therefore raises fresh questions about the long-term profitability of agent banking businesses in an increasingly competitive digital payments market.
Moove Exits Nigeria After Uber
Onafriq’s decision comes amid other notable changes in Nigeria’s technology and mobility sectors.
Legit.ng previously reported that Moove was leaving Nigeria six years after launching its operations in Lagos with 76 cars.
The company’s departure marked a significant development for a business that used Nigeria as an important market in building its global operations.
However, eligible drivers were set to benefit from the transition through outright ownership of vehicles they had been paying to acquire.
Together, the developments illustrate how companies operating in Nigeria’s technology-driven sectors are reassessing their operations amid changing economic conditions and business priorities.
While Onafriq intends to maintain its broader payments operations in Nigeria, the closure of Baxi marks the end of its current agent banking business and highlights the challenges of sustaining fintech operations in a difficult economic environment.