Bureau De Change (BDC) operators in Nigeria have begun discussions on mergers and acquisitions as they work to meet the recapitalization deadline set by the Central Bank of Nigeria (CBN).
Aminu Gwadabe, president of the Association of Bureaux De Change Operators of Nigeria (ABCON), revealed in an exclusive interview that stakeholder engagements and awareness campaigns are currently taking place across various regions to facilitate compliance with the new financial requirements.
Recapitalization Deadline Extended to June 2025
The CBN recently extended the deadline for BDC operators to comply with the new capitalization requirements from December 3, 2024, to June 3, 2025.
Gwadabe urged BDC operators to embrace mergers and strategic partnerships to meet the new financial threshold before the deadline.
“I strongly encourage our members to consider mergers as a viable option to comply with the recapitalization requirements before the extension lapses in June 2025,” he said.
CBN Grants Waiver on Non-Refundable License Renewal for 2025
In response to the CBN’s decision to waive the 2025 non-refundable license renewal fee, Gwadabe expressed appreciation on behalf of licensed BDC operators, describing it as a positive step towards regulatory compliance.
He noted that the waiver reflects the CBN’s commitment to implementing the revised 2024 financial capitalization framework for BDCs.
New Capital Requirements for Tier-1 and Tier-2 BDCs
Under the updated CBN guidelines:
- Tier-1 BDCs must have a minimum capital of ₦2 billion and will be permitted to operate nationwide, with the ability to establish branches and appoint franchisees.
- Tier-2 BDCs must raise at least ₦500 million and will be restricted to operating within a single state. They may set up a maximum of five branches but are not allowed to appoint franchisees.
These new financial requirements are part of broader CBN reforms aimed at restructuring the BDC sector to enhance its role in Nigeria’s foreign exchange market.
Revised BDC Guidelines and Operational Changes
The CBN’s updated regulations introduce new licensing requirements, clarify the permissible activities of BDCs, and strengthen corporate governance, as well as anti-money laundering (AML) and counter-financing of terrorism (CFT) measures.
According to the new rules:
- Tier-1 BDCs can operate in any state, including the Federal Capital Territory (FCT). They are allowed to open multiple branches and appoint franchisees, but must maintain a minimum distance of one kilometre between their branches.
- Tier-2 BDCs are limited to operating in a single state or the FCT and can establish up to five branches with CBN approval. However, they are not permitted to appoint franchisees.
The regulations also restrict certain financial institutions and individuals from obtaining a BDC license. Prohibited entities include:
- Commercial, merchant, and non-interest banks
- Payment service providers and financial holding companies
- International Money Transfer Operators (IMTOs)
- Employees of financial regulatory bodies
Industry Outlook
With the recapitalization deadline fast approaching, many BDC operators are considering consolidation as the most viable option to remain operational.
The CBN’s stringent new requirements aim to enhance transparency, curb illicit financial flows, and improve the efficiency of Nigeria’s FX market. However, some industry stakeholders argue that the new capitalization threshold could push smaller operators out of business, leading to reduced market competition.
As the June 2025 deadline nears, the BDC sector is expected to undergo significant restructuring, with mergers and acquisitions playing a crucial role in shaping the industry’s future.
