September brings two somber anniversaries. The first, and most heart-breaking is 9/11. An equally devastating event on the U.S. economy came on September 15, 2008, when Lehman Brothers, the fourth-largest investment bank in the U.S. at the time, declared bankruptcy and kick-started the "Great Recession." We are still feeling the effects today.

At first glance, Malaysia does not have a lot going for women starter-ups.  It is a Muslim state with conservative gender codes that persist in the fabric of domestic life.  State Sharia law continues to disenfranchise women legally (limiting divorce rights, for instance).  Despite these cultural realities, three cultural and socio-economic forces have combined to allow for radical experimentation in female entrepreneurship: A grow-or-die commitment to growth through innovation; a national imperative to optimize the productivity of its native workforce; and a strong public sector positioned to execute daring interventions.

September 15 marks the fifth anniversary of the bankruptcy of Lehman Brothers, an event that many see as having catalyzed the passage of Dodd-Frank. While small business loans were not a cause of the financial crisis, the regulatory response to the crisis has made small business credit more difficult to obtain.

Almost every business owner is used to finding and managing suppliers: funding is in many ways just another supply to be procured. Growing businesses are often unnerved by the idea of accepting external funding, particularly if it is the first time that they have done it outside of a trusted community of friends and family. They’re not only anxious about whether they’ll be actually be able to secure capital, but also what sort of funding to look for, and from which sources.

 Earlier this summer, the Cleveland Fed reported that small-business lending fell 78 percent from the summer of 2007 to the end of 2012, accounting for inflation. So-called alternative lenders—including Kabbage and On Deck Capital, peer-to-peer lenders, and firms that specialize in merchant cash advances—have picked up some of the slack, usually at pricier rates than traditional bank loans.For the most part, banks are probably fine with that because they don’t make much profit on loans for small amounts. But what happens when alternative lenders start helping small businesses bypass banks entirely?

You have probably heard about how the Fed has been “printing money,” and that interest rates are historically low. But small businesses don’t see it that way.A major corporation pays 2.3% to borrow (a 5-year “AA” bond). I pay 2.4% to borrow (a 5-year car loan). But a small business with $5 M in revenue pays 7-10% for a 5-year loan — that’s three to four times as much — if it can even get financing at all.

My research suggests that there is a viable alternative to local banks. It is something I call community financing. Community financing refers to a form of cash-flow that channels the financial resources of the savers of a community into the well-being of that community via economic activities, which members of the community believe should be undertaken and therefore willingly supports with their savings.

Last week there was hot debate following this article on PandoDaily which touched some nerves and started a significant tizzy about the 'classic' venture capital investment model versus the 'new' venture capital investment model. Descriptions of the two are: 'small number of grey-haireds in blue shirts and khakis' and 'platforms and systems of services from which to make and grow venture investments with a competive advantage', respectively.

Many African governments continue to outdo themselves trying to attract bigger investors, while leaving small and medium enterprises to their own devices. Professor Matthew Tsamenyi, president of the African Accounting and Finance Association, thinks this must change.

Created in 1977, PROPARCO is a Development Financial Institution partly held by Agence Française de Développement (AFD) and private shareholders from the North and South.
PROPARCO’s mission is to be a catalyst for private investment in developing countries which targets growth, sustainable development and reaching the Millennium Development Goals (MDGs).