CBN Approves 4,106 BDCs, 76 Finance Houses for Operations

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The Central Bank of Nigeria (CBN) yesterday confirmed operations of 4,106 bureaux de change (BDCs) and 76 finance houses.

The report on approval, posted on CBN website, also showed that the apex bank confirmed the operations of 1,028 microfinance banks (MfBs), two regional banks, three banks with Holding Company structures, five merchant banks, one non-interest bank and 19 commercial banks.

CBN regulation requires BDCs to meet N35 million mandatory capital base to stay in operation.

The CBN had previously returned N35 million cautionary deposit for BDCs to the operators, a circular signed by CBN Director, Financial Policy & Regulation, Kelvin Amugo said.

The apex bank had refunded the mandatory caution deposit of N35 million each to all BDC operators but retained the N1 million licencing fee paid by each of the operators.

Likewise, Finance Houses are expected to meet N100 million capital base for the subsector as stipulated by the regulator.

The CBN director said the finance companies sub-sector was envisioned to operate at the middle tier of the financial system, largely to cater for the financial needs of the Micro, Small and Medium Enterprises (MSMEs).

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They are also expected to leverage on the resources from the banking system among other sources of funding. The CBN had in a bid to sanitise the sub-sector, revoked the licences of 208 finance companies and cancelled the approvals-in-principle of 462 others due to the distress in the sub-sector.

By 2012, there were 116 finance companies in the records of the CBN; 51 licences were revoked by the CBN in September 2012 thus leaving a balance of 65 FCS with valid licences.

The idea is to have finance companies that are strong and virile to perform the functions they were set up to perform. The objective of shareholders in the operation of finance companies is to make profit, but for the CBN, it is to have stable and strong finance companies.