MFS Africa, a pan-African digital payments hub, on Wednesday, announced it has signed an agreement to acquire Baxi, one of Nigeria’s super-agent networks.
The deal, which is subject to approval from the Central Bank of Nigeria (CBN), will be the second highest fintech acquisition in Nigeria to date.
Nigeria is home to one of the most dynamic markets on the continent, it is Africa’s largest economy and home to the largest number of small and medium enterprises (SMEs).
It is also the largest payment market in Africa and home to one-third of intra-Africa settlement flows.
MFS Africa’s presence in Nigeria to date has been limited given the country’s small number of mobile wallets.
With the acquisition, MFS Africa will expand its pan-African network into Nigeria, connecting Nigerian businesses to the continent and the rest of the world.
“This deal is a pivotal step in our journey. By combining Baxi’s network of SMEs operating as agents with our pan-African network, we aim to take Nigeria’s SMEs to the rest of Africa and the world. Our expansion into Nigeria brings us one step closer in our mission of making borders matter less,” Dare Okoudjou, MFS Africa Founder and CEO, said.
Founded in 2014 by Degbola Abudu and Folu Majekodunmi, Baxi is one of Nigeria’s independent SME-focused electronic payment networks.
Baxi provides a cash-in/cash-out offering as well as value-added services which include, account opening, money transfer, bill payment and more, to the last mile.
Through its network of more than 90,000 agents, Baxi has already processed over $1 billion in transactions this year.
Following the acquisition’s close, MFS Africa will build Baxi into a key node on its digital payment network, allowing customers to make regional and global payments to and from Nigeria.
MFS Africa will also expand Baxi’s proposition for offline SMEs to select markets within MFS Africa’s footprint of 320 million mobile wallets across more than 35 African countries.
The mobile sector’s growth in Nigeria is being restrained due to previous restrictions to mobile network operators’ participation in mobile money services.
To serve the more than 55 percent of Nigerian consumers currently excluded from formal financial services, Nigerian fintechs that have built strong agent networks are the crucial interface to reach Nigeria’s 31 million financially underserved and 67 million financially unserved populations.
Supporting and nurturing SMEs is very important to Nigeria’s economy, as they contribute 50 percent of Gross Domestic Product and provide 76 percent of jobs.
With its presence in 36 Nigerian states, Baxi fills a critical gap by providing unbanked Nigerians and informal SMEs access to financial services.
The company aims at bringing a wide bouquet of digital products and services to the grassroots and mass-market consumers through innovation, technology and a world-class retail distribution network that is driven primarily by agents and merchants.
The focus areas of Baxi and MFS Africa are complementary.
While Baxi simplifies and integrates online and offline payments for SMEs and merchants in Nigeria through its omni-channel distribution network, MFS Africa simplifies cross-border payments, integrating payments via one hub.
“We believe that we’ve barely scratched the market’s potential. Only 3 percent of Nigerian SMEs have access to credit products. By teaming up with MFS Africa, and with the strong support of our local commercial banking partners, we can offer more value-added products and services, such as cross-border payments, to support Nigerian SMEs in their growth,” Degbola Abudu, Baxi CEO, said.
MFS Africa’s infrastructure enables disbursements and collections and connects partners to their network footprint of mobile network operators (MNOs), Banks and Cash Pickups through an application programming interface (API) or Business portal Portal, Beyonic.
Following the acquisition of Beyonic in 2020, MFS Africa continues to accelerate and lift its growth with strategic investment and acquisition, which are supported by its shareholders.
MFS Africa works in close partnership with players across the ecosystem to bring simple and secure mobile financial services to unbanked and under-banked customers. For millions of people on the continent and beyond, making borders matter less.