Fintech firm Onafriq Nigeria Payments Limited has introduced it’s going to wind down its Nigerian agent banking business, Baxi, and refocus on pan-African funds.
In an announcement on Friday, the corporate cited macroeconomic headwinds reminiscent of inflation and foreign money depreciation as key elements affecting buying and selling volumes and working prices and undermining the sustainability of its offline agent banking mannequin.
South Africa-based Onafriq, with a footprint in Morocco, Mali, Kenya, and Tanzania amongst others, entered the Nigerian agent banking market in 2021 when it acquired the Baxi business (also referred to as Capricorn Digital Limited) and invested closely via 2023 to strengthen and scale its agent community.
Operating circumstances modified considerably for the firm starting in 2024, with a pointy depreciation of the naira and broader macroeconomic pressures dramatically impacting its operations.
A speedy progress of prompt account-to-account funds concurrently modified the combo of transactions at brokers’ POS.
According to Onafriq, elevated competitors on this section, coupled with related margin compression, additional strained the business.
After reviewing its long-term technique and the business’s sustainability, the group concluded that winding down the agent banking operation is the way in which to go.
“We entered Nigeria with conviction and commitment, but did not achieve the outcome we set out for. 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,” Dare Okoudjou, founder and CEO of Onafriq, mentioned
“We are committed to honesty, fairness, and a well-managed transition for everyone impacted. Nigeria remains central to our mission, and we will continue to serve the market as a Payment Solution Service Provider through the Onafriq payments network and our card issuing services,” he added.
The closure will solely have an effect on staff whose roles are related to the agent banking business. The firm mentioned each affected worker will probably be consulted, handled pretty, and supported via the transition.
Onafriq mentioned brokers onboarded by way of the Baxi funds platform have been transitioned to one other principal financial institution, and it has requested them to switch their funds to their most popular principal financial institution inside 30 days.
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“Onafriq’s teams are available to provide support and guidance throughout the process. The company will continue to honour its commitments to affected stakeholders and communicate openly during the transition,” the corporate mentioned.
It added that the choice impacts solely its agent banking business in Nigeria and doesn’t symbolize an exit from the Nigerian market.
“Onafriq Group remains strong, with continued growth across its cross-border payments network and card issuing services,” it mentioned.
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