Bureau de Change feasibility study
A licensing question. A structured analysis. A conditional recommendation the client could act on.
01 / 07 — Context
A founder needed a licensing decision. Not a general finance study.
The client was a founder considering entry into the Nigerian foreign exchange market as a licensed Bureau de Change operator. The question was specific: was this venture viable, and if so, under what conditions should they proceed with an application to the Central Bank of Nigeria?
This is the kind of question where a general market overview is nearly useless. The decision hinged on regulatory clarity, capital requirements, competitive positioning in the specific locations under consideration, and realistic operating cost assumptions — not sector-level statistics.
02 / 07 — Regulatory mapping
Licensing requirements were mapped in detail, not just summarised.
MMK conducted a structured review of CBN licensing requirements for Bureau de Change operators, including minimum capital thresholds, compliance documentation, operational requirements, and timelines for application processing.
The review distinguished between requirements as stated in regulation and requirements as applied in practice — a distinction that matters significantly for any business operating in a regulated Nigerian market. The research identified specific compliance steps that would affect the project timeline and cost structure.
03 / 07 — Market demand
Demand was assessed for specific locations, not the national market.
Market need was evaluated for the specific geographic contexts under consideration — not the Nigerian foreign exchange market as a whole. MMK assessed foreign currency transaction volume patterns, informal exchange activity in the target areas, and the mix of retail and commercial demand.
This location-specific framing was deliberate: a BDC's commercial viability depends on its catchment area, the nature of demand within it, and the existing supply of licensed and informal exchange services. National market statistics provide context but not the evidence needed for a location-specific go/no-go.
04 / 07 — Competitive analysis
Informal exchange operators were treated as primary competition.
The competitive analysis mapped both licensed BDC operators in proximity and the informal exchange market — parallel channels through which foreign currency transactions occur outside the formal regulatory system.
Understanding informal competition was essential because customers choosing between a licensed BDC and an informal operator are making a trade-off between regulatory safety and price/convenience. The study assessed what rate differential and trust conditions would be necessary for the formal channel to compete effectively.
05 / 07 — Operating economics
Unit economics were modelled from stated assumptions, not benchmarks.
The financial analysis built up the operating cost structure from first principles: licensing fees, capital requirements, staff costs, premises, transaction volume assumptions, and spread revenue. Assumptions were stated explicitly in a summary table, allowing the client to adjust key inputs and understand the sensitivity of the conclusion to each one.
Three scenarios were modelled: base (realistic volume expectations), conservative (lower volume, tighter spread), and stressed (regulatory delay and cost overrun). The stressed scenario showed the investment remaining viable within a defined capital buffer.
06 / 07 — Risk register
Three risks were identified as material. The rest were acknowledged and parked.
The risk section focused on three risks that could change the recommendation: (1) regulatory timeline uncertainty affecting launch timing, (2) spread compression from informal market pricing pressure, and (3) capital adequacy if the licensing requirement changed between application and approval.
Each risk came with a mitigation and a trigger condition: the specific circumstance under which the risk would escalate from manageable to material. This gave the client a monitoring framework, not just a list of things that could go wrong.
07 / 07 — Recommendation and output
The recommendation was conditional and specific. The study was decision-ready.
MMK's recommendation: proceed to a licensing application, subject to confirmation of compliant premises in the primary target location and the appointment of a qualified compliance officer before application submission. The conditions were not boilerplate — they were the two factors that the analysis identified as necessary for the base-case projections to hold.
The deliverable was a full feasibility report including regulatory roadmap, assumptions table, financial model (three scenarios), SWOT, and risk register — formatted as a standalone document the client could share with legal counsel and a prospective CFO.
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Related insight
How to know whether a feasibility study is actually decision-ready
A study that spends forty pages describing market size but never answers "should we proceed?" has failed at its most basic job.
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