Onafriq Winds Down Nigerian Agent Banking Business

A person using a Point-of-Sale (PoS) terminal in an agent banking setting.

STARTUP VENTURE CAPITALOctober 16, 2026 at 2:56 PM UTC

TLDR

Onafriq Nigeria Payments Limited is winding down its Baxi agent banking business in Nigeria.
The company cited macroeconomic headwinds, including inflation and naira depreciation, and increased competition as key factors.
Onafriq will refocus on pan-African payments and continue to operate in Nigeria as a Payment Solution Service Provider.

Onafriq Nigeria Payments Limited announced on Friday its decision to wind down its Nigerian agent banking business, known as Baxi. The fintech firm stated it would refocus its operations on pan-African payments. This move comes after a strategic review of the business's sustainability in the face of challenging economic conditions.

Onafriq, a South Africa-based company with operations across Morocco, Mali, Kenya, and Tanzania, entered the Nigerian agent banking market in 2021 by acquiring Capricorn Digital Limited, which operated as Baxi. The company invested significantly through 2023 to expand its agent network, aiming to boost financial access and digitize cash transactions. However, operating conditions deteriorated sharply from 2024, driven by macroeconomic headwinds such as high inflation and a significant depreciation of the naira. These factors led to increased operating costs and a reduction in trading volumes, undermining the viability of its offline agent banking model.

While no specific financial figures were provided, Onafriq's substantial investment in strengthening and scaling its agent network through 2023 highlights the initial commitment to the Nigerian market. The company noted that a rapid growth in instant account-to-account payments simultaneously altered the mix of transactions handled by agents' Point-of-Sale (PoS) terminals. This shift, combined with intensifying competition in the segment, resulted in margin compression that further strained the business.

For Onafriq, the decision to close the Baxi business was difficult, impacting employees, agents, and business partners who contributed to building the network. Founder and CEO Dare Okoudjou acknowledged that the company did not achieve its expected outcomes despite entering Nigeria with conviction. The move signifies a strategic pivot for Onafriq, allowing it to concentrate on its core strengths in cross-border payments and card issuing services across Africa.

Onafriq has committed to a fair and well-managed transition for all affected stakeholders. Employees whose roles are tied to the agent banking business will be consulted and supported. Agents onboarded via the Baxi platform have been transitioned to another principal bank and advised to transfer their funds within 30 days. The company emphasized that this closure is limited to its agent banking operations and does not represent an exit from the Nigerian market, as it will continue to serve the country as a Payment Solution Service Provider.

Key Takeaways

The decision by Onafriq to wind down its Baxi agent banking operations in Nigeria underscores the severe challenges faced by businesses operating in the country's current macroeconomic climate. The company explicitly cited high inflation and the sharp depreciation of the naira as primary drivers for increased operating costs and reduced transaction volumes, making its offline agent banking model unsustainable. This situation reflects a broader trend where currency volatility and economic pressures erode profitability for companies heavily reliant on local market conditions and physical infrastructure. Furthermore, the rapid evolution of Nigeria's digital payments landscape, particularly the surge in instant account-to-account transfers, has fundamentally altered consumer behavior and transaction patterns at Point-of-Sale (PoS) terminals. This shift, coupled with heightened competition and subsequent margin compression, highlights the need for fintech firms to adapt swiftly to changing market dynamics. While Onafriq is exiting a specific business segment, its commitment to remaining in Nigeria as a Payment Solution Service Provider, focusing on cross-border payments and card issuing, indicates a strategic re-evaluation towards more resilient and potentially higher-margin services within the Nigerian financial ecosystem. This move could signal a future trend for other fintechs to specialize and leverage digital infrastructure rather than relying on extensive physical agent networks in a challenging economic environment.

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