By NIyi JACOBS
As the Central Bank of Nigeria’s (CBN) June 3, 2025, recapitalization deadline approaches, over 95% of licensed Bureau De Change (BDC) operators risk being forced out of business, according to the Association of Bureau De Change Operators of Nigeria (ABCON).
The industry is gripped with anxiety following the CBN’s directive in May 2024, which raised minimum capital requirements from N35 million to N2 billion for Tier-1 licenses and N500 million for Tier-2 licenses. The new capital thresholds are part of sweeping reforms aimed at strengthening regulatory oversight and improving transparency in Nigeria’s foreign exchange market.
Tier-1 BDCs are allowed to operate nationwide, while Tier-2 operators are restricted to a single state. The revised guidelines, issued under the powers of Section 56 of the Banks and Other Financial Institutions Act (BOFIA) 2020, followed consultations with industry stakeholders.
Despite a six-month extension granted by the CBN in November 2024, compliance has remained abysmally low. ABCON President Aminu Gwadebe told Nairametrics that less than 5% of its members have met the recapitalization requirements, leaving the remaining 95% uncertain about their future.
“The entire sector is heightened with anxiety,” Gwadebe said. “Only a handful have met the financial requirements. Unless the deadline is extended, most of our members will be shut out of the market.”
He added that ABCON is actively engaging the CBN and encouraging mergers among members to help meet the new capital thresholds. “We’re advocating strategic mergers and awaiting CBN’s framework that would recognize existing capital in the consolidation process,” he noted.
The policy shift has sparked debate. Some stakeholders, including Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE), have warned that the recapitalization drive could unintentionally foster monopolies in the parallel forex market.
“BDCs are like microfinance banks in the financial ecosystem,” Yusuf argued. “CBN must avoid creating a situation where only a few players dominate the market.”
In Abuja’s Wuse Zone 4—Nigeria’s busiest BDC hub—many operators are struggling to raise the new capital. Mallam Adamu, a long-time operator, acknowledged the CBN’s intentions but expressed concern that many small players may be pushed out.
“There have been talks about mergers, but it’s tough. Some of us will meet up, others won’t. We just hope the CBN considers an extension,” he said.
ABCON has consistently maintained that the BDC business is not capital-intensive since operators neither take deposits nor offer loans. The association has proposed more modest capital bases—N500 million for Tier-1 and N100 million for Tier-2—as more practical, arguing that mergers, not recapitalization, should drive industry consolidation.
Whether the CBN will grant another extension remains unclear. But for now, Nigeria’s BDC sector stands at a critical juncture—caught between a reform-driven apex bank and the survival concerns of hundreds of small currency traders.
