…Operators appeal to CBN for deadline extension, requirement review
The deadline for the recapitalisation of Bureau De Change (BDC) operators is expected to end today, with less than 10 percent of the 1,500 licensed operators said to have complied.
The Central Bank of Nigeria (CBN) had initially set the deadline for BDC recapitalisation on December 3, 2024, but later extended it by six months to June 3, 2025, to give operators more time to meet the new requirements.
However, with the new deadline now here, most BDCs are still unable to comply.
Aminu Gwadabe, president of the Association of Bureaux De Change Operators of Nigeria (ABCON), said the level of compliance remains alarmingly low.
“As we speak, I’m not sure that up to 10 percent have completed the capitalisation process. Over three million people may lose their livelihoods as a result of this issue, either directly or indirectly. We are talking about 1,500 entities with employees and families who will be impacted. It’s a disturbing phenomenon, as many of us will hardly meet the deadline,” Gwadabe said.
Read also: BDCs recapitalisation to edge out fringe players
He appealed to the CBN to grant a further extension of the deadline and also reconsider the financial thresholds for compliance, noting that many operators are still striving to meet the recapitalisation criteria.
The new recapitalisation regime introduced by the CBN in February 2024 came with a two-tier structure for BDCs. Under this framework, Tier-1 BDCs must raise a minimum capital of N2 billion to continue operations, while Tier-2 BDCs are required to raise at least N500 million.
Tier-1 BDCs will be licensed to operate nationwide with broader operational latitude, while Tier-2 operators will be restricted to a single state of operation.
Gwadabe urged the CBN to continue engaging with stakeholders during any further extension period to ease the mounting anxiety and pressure currently facing the sector.
He also called for the swift processing of licence applications to give clarity, hope, and direction to existing and prospective investors who have either met or are working toward meeting the new requirements.
As part of its efforts to cushion the impact of possible job losses and forced exits from the market, ABCON is actively engaging the CBN and lobbying other relevant agencies.
Gwadabe said strategic sessions are being held among ABCON members to explore structural solutions such as mergers, investor buyouts, and obtaining regulatory approval to establish public limited liability companies across clusters to promote wider participation.
He explained that the merger plans involve grouping willing operators into sets of 5, 10, 15, or 20 to form new entities that can meet the recapitalisation threshold collectively.
“We have also applied to the CBN for a ‘no objection’ to float a public limited liability company capable of accommodating many of our members, but so far, we’ve only received a holding response,” he added.
Read also: Banks’ dollar hoarding threatens naira stability, say BDCs
Mergers likely, small players may go
The increased capital requirements are widely expected to squeeze out smaller BDCs that may not have the financial capacity to meet the new thresholds. Many of them may be forced to exit the market, merge with other operators, or seek outside investment.
Tilewa Adebajo, CEO of CFG Advisory, remarked last month that, “Some will make it, most will not, and we will have stronger and more serious players. That industry needs to become structured and professional.”
Ayodele Akinwunmi, senior relationship manager at FSDH Merchant Bank, echoed this sentiment. He said, “I believe some of the BDCs will not be able to meet the new recapitalisation level. Tier-1 BDCs are required to have a minimum capital base of N2 billion, while Tier-2 BDCs must raise N500 million. As of my last count, there are 1,517 BDCs in Nigeria. I expect BDCs to engage in mergers and acquisitions so that bigger and stronger players will emerge to serve the retail FX market.”
His view reflects broader expectations that industry consolidation through mergers and acquisitions will be a likely path for many BDCs seeking to survive under the new capital regime.
