The lending program will operate in Uganda, Ghana, Mozambique and Tanzania.
The Standard Bank of South Africa put up the money for the Alliance for a Green Revolution in Africa who will conduct the program. $100 million dollars will be put into the fund over the next three years.
Kofi Annan is a chair person for the Alliance for a Green Revolution in Africa. He spoke at the unveiling ceremony which was attended by reporter Hellen Mukiibi of New Vision.
"Inflation, food shortages, and trade imbalances all pose huge social, economic, and political risks. But while credit is frozen worldwide, Africa cannot wait for a thaw," Annan said at the unveiling event in Accra on Wednesday.
"Programmes such as this, which increase the productivity of smallholder farmers and help catalyse an African Green Revolution, will ultimately enable Africa to achieve food security and stability, and thus improve the entire global outlook."
Standard Bank Group boss Jacko Maree said "as a leading emerging markets bank, our goal is to perform a transformative role in the continent's agricultural sector in partnership with other organisations.
Transforming small scale farmers into medium-sized enterprises is essential to address the food security and to stimulate economic growth." Similar to farmers in developing countries, the Uganda small land holders lack access to finance.
This been the worldwide major obstacle preventing farmers from investing in basic inputs, such as good seeds, fertilisers and small-scale irrigation needed to raise farm productivity and generate profit.
As a result, their yields poor, estimated at one-quarter of the global average leading to pervasive hunger and poverty across Africa.