Onafriq, the payment services provider, has announced the closure of its agent banking business in Nigeria, popularly known as Baxi, citing rising operating costs, persistent inflation, naira depreciation, and growing competition. The company gave agents 30 days to transfer their funds to a preferred principal bank. Despite the shutdown, Onafriq will remain in Nigeria, continuing its wider payment services and card-issuing operations.
Why Onafriq is shutting down Baxi
In a statement, Onafriq explained that Nigeria's economic conditions had significantly weakened the commercial viability of its agent banking operations. The company entered the market in 2021 after acquiring Capricorn Digital Limited, operators of Baxi, and subsequently invested heavily in expanding its agent network through 2023.
However, the business landscape changed considerably in 2024 as the naira's depreciation, inflationary pressures, and rising operational expenses eroded profitability. According to Onafriq, the rapid adoption of instant bank-to-bank transfers also transformed transaction patterns at PoS outlets, intensifying competition and squeezing profit margins. These developments made the traditional offline agent banking model increasingly difficult to sustain.
Following a comprehensive strategic review, the company concluded that winding down the operation was its most sustainable option. The development marks a significant setback for the company's investment in Nigeria's agent banking industry, which has played an important role in expanding financial services to underserved communities.
CEO speaks on difficult decision
Onafriq's founder and Chief Executive Officer, Dare Okoudjou, described the closure as painful, acknowledging its implications for employees, agents, and business partners. "We entered Nigeria with conviction and commitment, but did not achieve the outcome we set out for," Okoudjou said.
He explained that the company remained committed to treating affected stakeholders fairly and ensuring an orderly transition. The CEO also reaffirmed Onafriq's confidence in Nigeria's financial services market despite the disappointing outcome of its agent banking investment.
Baxi agents given 30 days to transfer funds
As part of the shutdown arrangements, Onafriq disclosed that 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 assured agents that its support teams would remain available to guide the process. Employees whose responsibilities are directly connected to the discontinued business will also be affected. Onafriq pledged to consult affected workers, provide appropriate support, and honour its commitments during the transition.
Onafriq says it is not leaving Nigeria
Despite the closure, Onafriq stressed that it was not withdrawing entirely from Nigeria. The company will continue providing payment services through its broader African payments network and card-issuing operations. It maintained that Nigeria remains strategically important to its long-term growth plans.
The development nevertheless highlights the mounting pressures facing financial technology operators as economic instability, changing consumer preferences, and intensifying competition reshape Nigeria's digital payments industry. In a related development, Legit.ng earlier reported that Moove is leaving Nigeria after six years, closing the chapter on the market that helped build its global business. For eligible drivers, the departure comes with a significant reward: outright ownership of the vehicles they have been paying to acquire.
