The Bank launched this initiative in partnership with the Alliance for a Green Revolution in Africa (AGRA), Kilimo Trust, Millennium Development Agency, Ghana and the Millennium Challenge Account Mozambique (First Loss partners).

The objective the fist initiative is to make agricultural finance more accessible to smallholder farmers and SME agricultural producers through cooperative mechanisms.

The second initiative is a Trade Finance Risk Sharing Agreement, which aims to build trade finance capacity in African countries at affordable rates.

OFID will share the risk on a 50/50 split basis with Standard Bank Plc and Standard Bank of South Africa on trade finance transactions of up to US$300 Million in total entered into by Standard Bank with certain eligible banks in a number of African countries.

Agreements covering both initiatives were signed by the two sides in London, according to www.newbusinessethiopia.com

Suleiman Jasir Al-Herbish, Director General of OFID, is quoted as saying: “The two institutions' knowledge of local and development financing in Africa ensures a quick launch of the much needed funding facilities to African farmers and local banks.”

The smallholder scheme is expected to assist up to 750 000 farmers and small business owners in Ghana, Mozambique, Uganda and Tanzania. The scheme is a three year program in which the First Loss Partners provide the Bank with a first loss guarantee and also assist with technical support to improve agricultural efficiencies.

In support of the smallholder scheme, OFID agreed to provide 50% Risk Participation on the remainder of the Bank’s potential risk. Through Standard Bank’s network, the facility will make available up to US$50 million in the first year, 66 million USD in the second year and 100 million USD in the third year for the four countries.

“…That we are jointly managing and sharing risk is a tangible sign of our joint commitment to successful implementation of these agreements - which ultimately will encourage economic growth in Africa,” said Brad Koen, Standard Bank Managing Director and Global Head, Investment Banking & Coverage.

Standard Bank Group operates in 17 African countries. Outside the African continent, Standard operates in 16 countries.

AGRA is an African-led partnership working across the continent to help millions of small-scale farmers and their families lift themselves out of poverty. The alliance’s Board of Directors is chaired by Kofi Annan and it has thus far received support from the Rockefeller Foundation; the Bill & Melinda Gates Foundation; the UK Department of International Development and other donors.

The two initiatives follow up on the objectives set by the 2009 G-20 Summit in Pittsburgh, USA, which was chaired by US President Barack Obama.

The summit had called upon the private sector to identify sustainable business strategies for public/private partnerships to improve access to finance for the poor and with a particular focus on small and medium-size enterprise (SME) financing.