Onafriq Winds Down Baxi Agent Banking in Nigeria After Five Years

Onafriq, the pan-African payments company formerly known as MFS Africa, is winding down Baxi, its Nigerian agent banking business, after five years, saying inflation, naira depreciation and the rapid spread of instant account-to-account payments have made the offline model unsustainable.

The company confirmed the decision in a statement on Friday, following reports by Techpoint Africa and Techcabal. It stressed that the closure is confined to agent banking and does not represent an exit from Nigeria, where it will continue operating as a Payment Solution Service Provider through its payments network and card-issuing services.

Why the economics stopped working

Agent banking grew in Nigeria by monetising cash: agents accepted deposits, made withdrawals and processed bill payments for customers far from bank branches. That model depends on stable transaction volumes, manageable operating costs and a cash economy that keeps expanding.

Each of those supports weakened. Naira depreciation and inflation raised the cost of running agent outlets. Competition compressed the margin on each transaction. And the fastest-growing payments behaviour in urban Nigeria is now instant transfers between accounts, which bypass the agent entirely. For a group whose core competence is cross-border payments across 40 African countries, sustaining a domestic cash-out network under those conditions was hard to justify.

How the wind-down is being handled

Baxi agents have been transitioned to another principal bank, and Onafriq has asked them to move funds to a preferred principal within 30 days. Employees whose roles are tied to the agent banking business will be consulted and supported through the transition, though the company did not disclose how many are affected.

Chief executive Dare Okoudjou acknowledged the human cost. "We entered Nigeria with conviction and commitment, but did not achieve the outcome we set out for," he said. "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."

A wider fintech retrenchment

Onafriq entered the market by acquiring Capricorn Digital, operator of the Baxi brand, in a deal announced in October 2021 and completed in March 2022 after Central Bank of Nigeria approval. At the time, Baxi claimed more than 90,000 agents and over $1.6 billion in cumulative transaction volume.

The retreat fits a pattern. Chimoney, a cross-border payments infrastructure company, ceased operations in May after struggling to raise capital, and Gigbanc announced a wind-down in July. Across the sector, businesses tied to high-cost physical networks or thin-margin transaction flows are being pruned as funding conditions stay difficult.

What remains in Nigeria

Onafriq says Nigeria remains central to its mission, with growth continuing in cross-border payments and card issuing. The strategic bet is that embedded payments infrastructure for businesses is a better use of capital than running consumer-facing agent retail. Whether that bet holds will depend on merchant adoption and the group's ability to convert its continental network into domestic volume without the agent layer that once supplied it.