• Monday, May 27, 2024
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BusinessDay

Number of BDCs continues to swell after CBN’s recapitalisation deadline

Bureau-De-ChangeThere are indications that the number of bureau de change operators in the country has continued to swell even after Central Bank of Nigeria’s (CBN) recapitalisation deadline of July 31, 2014, BusinessDay investigation reveals.

The CBN on August 15, 2014 published a list of confirmed bureau de change operators in compliance with new requirements as at July 31, 2014 which stood at 2,442.
On September 25, 2014, the apex bank came out with another list of 2,501 BDCs which is about 59 or 2.4 percent higher than the fist list.

One of the operators said from his own list he can see an increase in the number of BDCs to 2,700 from 1,200 he had earlier.

Analysts said the implication of this is that the CBN is still giving room for recapitalisation after the deadline leading to increased number of operators rather than regulating reduced and stronger BDC operators.

Reacting to the development, Ibrahim Mu’azu, CBN’s director of corporate communications, said there are some BDCs that had issues to be resolved after recapitalisation, adding that the number released earlier is the one that is cleared.

He said the entire exercise is not a one day affair but something that takes a process before arriving at a conclusion.

According to him, the CBN is no longer receiving application for recapitalisation from any BDC operator. Furthermore, he said the CBN has stopped dollar supply to un-recapitalised BDCs which is one of the measures towards checkmating illegal operation of BDCs.

“We are not receiving any new application”, Mu’azu told BusinessDay on telephone.

Andrew Elueni, chief executive officer, Prime Link BDC, was concerned that the activities of the sub-sector are that of “going back to square one”.

He was worried that the CBN increased the number of dollar supply to banks up to $300 million but reduced that of BDCs to $15,000 per week. This, he said, is affectcoming their business negatively.

There are about 3,000 licensed BDCs in the country today. At inception, the CBN sold $600,000 to each BDC per week. But over time this has been reduced to $50,000 per week per BDC. This amounts to $200,000 per BDC per month before it was further reduced to $15,000 per week.

Meanwhile, not all the 3000 licensed BDCs participate in this dollar sale every week.

Elueni said the market is becoming tougher and that BDCs have to look for other ways of survival rather than relying on the CBN window. He said they have to shift focus to those who are coming from abroad as their source of dollar supply.

There are three sources of dollar to BDCs which include the apex bank, deposit money banks and individuals.