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BDCs Seek Mergers, Not Recapitalization, Says ABCON

The Association of Bureaux De Change Operators of Nigeria (ABCON) clarified on Thursday that it is advocating for mergers among Bureaux De Change operators, not a recapitalization of the industry.

In a statement, ABCON President Alhaji Aminu Gwadabe said the recommendation aims to strengthen corporate governance and engagement with the Central Bank of Nigeria.

Gwadabe pointed to the 2007-2008 consolidation when Class A BDCs were allowed to merge to meet a $1 million weekly allocation threshold with a $500,000 capital base. ABCON is seeking a similar business model again to merge BDCs rather than raise the capital base of each operator.

Currently, each CBN-licensed BDC is capitalized at 35 million naira. Rather than increase this amount, ABCON suggests allowing at least 10 BDCs to merge into a new 350 million naira entity.

Gwadabe said mergers would expand operations, diversify funding sources, reduce regulatory pressures, and prepare BDCs for larger roles like handling diaspora remittances. He cited the 2004 bank consolidation exercise as a model.

ABCON rejects reports calling for BDC recapitalization, Gwadabe said. The association is working to clarify its stance, which is for voluntary mergers and consolidation rather than outright capital increases.

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