Oceanic Bank International Plc and United Bank for Africa Plc (UBA) have commenced post-consolidation expansion in the Mortgage sector of the economy as they lead a consortium of banks to invest in the Federal Mortgage Bank of Nigeria (FMBN) N100 billion to provide Housing Loans to civil servants under an on-going sale of government houses.

The agreement between the FMBN and the banks was signed in Abuja, Tuesday night where some loan beneficiaries received their cheques to enable them pay the initial 10 per cent deposit for their houses, under the scheme.

The Managing Director of Oceanic Bank Plc, Mrs. Cecilia Ibru who signed on behalf of her bank said they were giving out over N100 million to civil servants under the scheme, with some receiving between N100,000 and N1 million.

She said the partnership between the FMBN and the banks was unique as it marked the beginning of an era when Nigerian banks could take advantage of the large mortgage market available in the country, adding, "we can see the future and the greatness of our country."

She noted that a lot of cash had been locked up in the past without such funds being put to full use in order to create more wealth, not only for the individual corporate organisations but for the entire national economy.

"This is a great platform for millions and millions of Nigerians. It will attract employment. As for us in the banking sector, we are excited. The Bond ranks with the Treasury Bills. It is cashable at any time and therefore, a tremendous means of wealth creation in our society", she said.

Also speaking, Mr. Bello Garba, an Executive Director of the UBA, said the scheme would once again raise the Middle Class which was extinct in the Nigerian society and that owning houses would become a lot easier than most members of the society could imagine.

Housing, he pointed out, was critical to any national economy and that the current arrangement would trigger a revolution in the Housing sector of the Nigerian economy, and that if sustained, housing would no longer be a problem in the country.

Earlier, the Managing Director (MD) of the FMBN, Mr. Tanimu Yakubu said the agreement would make it mandatory for his organisation to purchase mortgages built by Primary Mortgage Institutions (PMIs) and financial institutions in the country.

According to him, the N100 billion bond being floated was only the first phase to enable civil servants purchase government houses in Abuja and that similar schemes would be opened for other cities such as Lagos, Enugu, Ibadan and Port-Harcourt.

The banks in the consortium would be expected to provide loans to civil servants at an interest rate of between 9.5 per cent and little above 19 per cent. Oceanic Bank is the only one providing its loans at less than 10 per cent. The loans would be repaid in 15 years.