Onafriq Shuts Down Baxi Agent Banking Business in Nigeria Over Rising Costs, Competition

Pan-African financial technology company Onafriq is winding down its Baxi agent banking business in Nigeria, citing rising operating costs, naira depreciation and intensifying competition that have made the operation increasingly difficult to sustain.

The company confirmed the decision in an email to PUNCHOnline on Friday, clarifying that the move affects only its agent banking business and does not represent an exit from Nigeria. Onafriq said it would continue serving the country through its payments network and card-issuing services.

According to the company, the business environment changed significantly from 2024 as currency depreciation and broader economic pressures altered the cost of operating its network. The rapid adoption of instant account-to-account transfers also changed customer transaction patterns, reducing the attractiveness of some services traditionally handled through agents’ point-of-sale (POS) terminals.

Onafriq added that stronger competition and pressure on transaction margins further weakened the business model. Agent banking networks typically provide services such as cash withdrawals, money transfers, bill payments and account opening through third-party outlets. Their sustainability depends on transaction volumes and the margins available after agent commissions and other operating expenses are covered.

Dare Okoudjou, Onafriq’s founder and chief executive officer, described the closure as a difficult decision, acknowledging the impact on employees, agents and business partners who helped build the Baxi network. He said the company had entered Nigeria with strong commitment but had not achieved the outcome it originally intended.

Onafriq entered Nigeria’s agent banking market in 2021 through an agreement to acquire Capricorn Digital Limited, which operates under the Baxi brand. The acquisition was completed in March 2022 following approval from the Central Bank of Nigeria. Founded in 2014, Baxi had built a network of more than 90,000 agents offering services including cash withdrawals, transfers, bill payments and account opening.

The company said it continued investing in the business through 2023 before reviewing its long-term strategy and concluding that winding down the operation was the appropriate decision. The closure will affect employees whose roles are tied to the agent banking business, but Onafriq said they would be consulted, treated fairly and supported during the transition.

Onafriq also said agents using the Baxi platform had been transitioned to another principal bank. It has asked agents to transfer their funds to their preferred principal bank within 30 days and said its teams would provide guidance throughout the process. The company reiterated that Nigeria remains central to its wider operations, including its payments infrastructure and card-issuing services.