AECF chief executive officer Hugh Scott told journalists that the fund is backed by some of the biggest names in development finance and hosted by the Nairobi-based Alliance for the Green Revolution in Africa (AGRA) chaired by the former UN chief Kofi Annan.

"The AECF is a 50 million dollar private sector fund, set up to encourage private sector companies to compete for like-for-like investment support for new business projects in the agricultural and financial sectors," Scott said.

He said proposals will need to show a positive impact on the rural poor in Africa such as increased employment, reduced costs or improved productivity.

"I am proud that AGRA and the Africa Enterprise Challenge Fund are launching this partnership. By stimulating investment in financial and agricultural markets, the AECF will support policies to boost agricultural productivity, create new jobs and develop enterprise in rural areas," Annan, Chairman of AGRA, said in a statement.

"Together, AGRA will work with the AECF to help lift millions of African small-scale farmers out of poverty and hunger." Scott said AECF will operate across African from three regional hubs -- Nairobi, Accra and Johannesburg.

He said the fund will put out several calls for proposals every year for the next six years. The fund will also offer grants or non-recourse loans of up to 1.5 million dollars for each project.

"Applicants will need to contribute at least 50 percent of the total cost of the project. Access to the fund is open only to for-profit entities and entrepreneurs," Scott said, noting that single country, multi-country and regional projects will be considered.