By providing small businesses with incubators, Israeli industrialist Stef Wertheimer hopes to give Israelis and Arabs economic opportunities that will lead to peace.

About five years ago, Stef Wertheimer came across Gamila Hiar, a Druze woman with no formal education who had learned the ancient art of making soap from wild herbs and olive oil as a child. At the time, Hiar was supplementing her family's income, producing about 500 soap bars a week, from a corner in a room underneath her house in Pqi'in, a village in the Galilee region of northern Israel.

When Wertheimer met Hiar, her soaps had a devoted local following and were referred to as "the magic soaps of Gamila" for their restorative properties. Wertheimer was impressed. "We found that she was an entrepreneur," says Wertheimer. "She just needed more space to dry her soaps. I asked her if she wanted to come to one of my industrial parks."

Developing Exports

Hiar, now 68, ended up at Tefen Industrial Park, a bold philanthropic enterprise located about eight miles from the Lebanese border. Wertheimer (BusinessWeek.com, 3/14/08), the founder of Iscar Metalworking, established Tefen in 1985 in order to encourage entrepreneurship in one of Israel's most undeveloped and low-income regions, with a population split largely between Arabs and Jews. According to Wertheimer, 81, "there are no unemployed, only people who are unlucky to find a job."

The Tefen model is based on a business and social incubator concept. In a country with few natural resources and a tiny domestic market, its purpose is to help develop businesses that manufacture for export. Startups are given space to rent and a number of business and administrative services (usually at reduced fees or for free) such as help in business planning, marketing, and entrepreneurship, and access to postal and banking facilities. Although many of the companies are small, the park's structure allows each firm to operate and export on a much larger scale than it could were it operating independently. After a company has established itself, it is expected to leave and become independent. On average, the companies stay between 5 and 10 years. That allows new businesses to take their place.

Currently, Tefen houses 21 companies employing 500 people-many of them Arab and Druze. They include a research and development arm of SanDisk (SNDK), a flash memory device company with worldwide sales of $3.9 billion, a glassmaker, and Kolsint, a maker of lenses for imaging cameras for nuclear medicine that reportedly supplies 50% of the world market. Tefen is also home to Iscar's headquarters and its bright yellow high-tech plant where whistling robots travel the factory floors. In May, 2006, Berkshire Hathaway's (BRK) Warren Buffett acquired an 80% stake in Iscar for $4 billion (BusinessWeek.com, 5/8/06).

"WE STARTED out abroad as ‘accidental tourists’,” says Anand Mahindra, managing director of Mahindra & Mahindra, an Indian maker of tractors and off-road vehicles. Owed money by a Greek manufacturing plant, it took an equity stake instead, and so Mahindra Hellenic was born in 1984.

Mahindra & Mahindra is now one of 100 companies from the developing world that Boston Consulting Group (BCG) thinks have the clout and ambition to upset the world's multinationals. The consultants sifted over 3,000 companies from 30 countries, picking firms that had revenues approaching or surpassing $1 billion last year and are expanding overseas aggressively (not accidentally). They measure this expansionism by five criteria, including the firms' international sales and assets, and the money they can tap for foreign raids and acquisitions.

The result is a list that cunningly appeals to the pride of the aspirants and the insecurity of rich-world incumbents. According to Fortune magazine, Jeff Immelt sent last year's list to his underlings at General Electric, ordering them to identify the companies it could sell to and buy from, and those it would have to compete with.

The fourth Arab Meeting for Small and Medium Industries, which was held in Sana’a from 25-26 November, has recommended establishing an Arab Investment Bank to finance small and medium industries, to be approved at the next pan-Arab summit. The meeting called on Arab countries to set up a legal framework to organize small and medium industries and to unify government efforts to assist this sector.

It was recommended that Arab countries should create financial mechanisms which cover the operational needs of small and medium industries through setting up co-operative banks, on the lines of those found in European countries.

Endeavor (www.endeavor.org) invited 12 high-impact entrepreneurs from South Africa, Brazil, Chile and Egypt to join its network last week at an International Selection Panel in Cape Town, South Africa.

These entrepreneurs represent nine companies operating in fields ranging from voice-over IP mobile telecommunications and broadband communications from South Africa, affordable dialysis care in Brazil, yarn production in Chile and wireless technology based in Egypt.

By Roben Farzad

It isn't easy for Masoud Alikhani to check on his investment. The Iranian-born Briton owns a facility in Mozambique that turns jatropha, a hardy, drought-resistant plant, into biodiesel. An October visit starts with an 11-hour flight from London, his home base, to Johannesburg. From there he jumps into a four-seat Piper Seneca II for a wobbly three-hour flight to Maputo, Mozambique's capital, during which one of the passengers, this writer, gets violently ill. On landing at Maputo's airport, where soldiers stand guard on the roof, Alikhani spends an hour wading through the bureaucratic muck of visa clearance and immunization checks. Then it's back on the plane for a 90-minute flight along the Indian Ocean coast to the province of Inhambane. At the 7-Eleven-size airport there, Alikhani is met by his brother and business partner, Said, for a 90-minute drive past wayward livestock and random brush fires to the village of Inhassune. At the end of a long dirt road, on a vast tract of reclaimed scrubland, sits the Alikhanis' massive biofuel complex. They try to visit every two months.

The brothers are among a growing cadre of intrepid investors looking for treasure in the 30-plus sub-Saharan African nations stretching from Mauritania and Somalia in the north to the continent's southern tip. There's no blueprint for this kind of investing: The best opportunities must be dreamed up and then created from scratch. The Alikhanis saw upside in a fallow cotton plantation. In Nigeria, U.S.-based private equity firm Emerging Capital Partners last year helped acquire an abandoned factory in hopes of supplying the continent with desperately needed fertilizer. South Africa-based microlender Blue Financial Services, energized by an investment from Wall Street last year, now has 171 branches in nine countries, with offices opening soon in Rwanda, Cameroon, Swaziland, and elsewhere. All told, at least $2.6 billion in private equity deals have been struck this year in the region (excluding more-developed South Africa), nearly seven times the 2005 figure.

This is the investing world's final frontier, so undeveloped and impoverished that it makes other extreme emerging markets like Colombia and Vietnam seem like marvels of modernity.

The United States pledged on Monday to provide up to $250 million to jump-start three new African investment funds aimed at developing the continent's capital markets so African businesses can more easily raise money.

The announcement came on the final day of a five-day African visit by Treasury Secretary Henry Paulson, who said Africa needs all the investment it can get from anywhere in the world.

Paulson and the president of the U.S. government's Overseas Private Investment Corp (OPIC), Robert Mosbacher, said OPIC will provide initial financing to get the funds started.

The Financial Times, in partnership with IFC, the private sector arm of the World Bank Group, today launched the 2008 edition of the FT Sustainable Banking Awards, the leading awards for triple bottom line banking.

Two new categories - Banking at the Bottom of the Pyramid, and Sustainable Investor of the Year - have been added to the ground-breaking programme.

The awards, now in their third year, were created by the FT and IFC to recognise banks that have shown leadership and innovation in integrating social, environmental and corporate governance objectives into their operations.

Nobel laureate Prof Muhammad Yunus has asked for major reforms in the World Bank saying the multilateral development bank has not been successful in achieving its main goal of poverty alleviation.

"The world has gone through so many changes over the last few decades, but the World Bank remains static since its establishment about 60 years ago. It needs reforms and there should be a rethink of its policies," Yunus told reporters after a meeting with visiting WB President Robert Zoellick at his Grameen Bank's Headquarters in Mirpur yesterday.

"Within the present structure, World Bank country offices are working like post offices," Yunus said, adding the offices wait for directives from the headquarters and implement those.

Entrepreneurs love to grumble about the roadblocks and delays created by bureaucrats. Government officials, they say, are slow, bumbling and concerned only about hewing to their rules and clocking out at 4:55 p.m.

But in a study of global entrepreneurship, Raffi Amit and Mauro Guillen, both Wharton management professors, have found that a simple, if smart, bureaucratic initiative mattered critically in determining a country's level of entrepreneurship. Specifically, countries that created electronic business registries saw far higher levels of new business formation than those with traditional paper ones. Even the announcement that a country planned to establish an online log led to a jump in business registrations.

How could such a small change make such a big difference?

By Matthew Clark

With a click of a cellphone key, Bernard Otieno makes the transfer – sending funds instantly from his residence in a sprawling Nairobi slum to his wife, who holds down their rural family farm some 250 miles away.

Mr. Otieno, a security guard who works the night shift, used to risk carrying cash on infrequent, slow trips to his hometown or pay high rates to send money through the post office.

Now, he's one of a growing number of Kenyans tapping into a service called M-PESA – M for "mobile" and pesa for "cash" in Swahili. Launched this year, it's one of the world's first cellphone-to-cellphone cash-transfer services for people who lack access to conventional banks.

Most banks have found it far too costly to set up services for the billions of poor people in developing countries. But with cellphone banking, which eliminates most administrative costs, banks could soon find it worth their while to serve the poor. On a continent with more than 225 million cellphone users – double what it had just two years ago, according to World Bank statistics – the impact could be profound on poor families' ability to save for a house, plan for emergencies, or get a loan.

At least three or four times a year, Saher sends a portion of her salary home. The money helps her parents buy necessities, and even creates a bit of savings in a place where the few jobs that still exist often don't pay for months, if at all.

Dr. Khaled Awad is a risk-taker. A doctor by training, he decided at age 26 to give up a secure position in one of Egypt's state-run hospitals to do something considered crazy by most of his countrymen: Start his own business.

Awad, whose company transmits stock market data directly to mobile phones, is so unusual in Egypt that business people and academics are still trying to agree on a common Arabic word for "entrepreneur."

Microfinance is in no way charity, rather it is a proven effective tool to assist low-income families move beyond hand-to-mouth survival and plan for the future.

With this in mind, one of the Kingdom's major micro-lenders, Tamweelcom, held an event on Saturday to launch an educational grant programme and a newly developed "marketing gateway."

"Tamweelcom has looked beyond lending like traditional microfinance institutions. We are providing a value chain service and have introduced new techniques… our clients know that we are not just a loan centre, we are business service providers; and word of mouth is our biggest promoter," Tamweelcom CEO Ziad Rifai told The Jordan Times.

Surrounded by measuring tapes and ornate paintings of Hindu gods hanging on the walls of his dimly lighted workshop, Adimulam Devanand pushed the bridge of his glasses up his nose and hunched over a sewing machine to stitch a shirt.

A year ago, Devanand, 42, had lost the ability to see objects as fine as a needle and thread, and his tailoring business was faltering.

"I'd given up working altogether, and my wife had to do all the work," he said over the hum of the sewing machine.

Desperate to support his two children, he went to a local clinic where he was found to have presbyopia, an age-related disorder in which the eyes progressively lose the ability to focus. The clinic sold him a pair of corrective glasses for 150 rupees, or $3.72.

Devanand was immediately able to return to his craft.

"Now I can share all the work with my wife," he said, gesturing to the woman who sat at an adjacent sewing machine, "and business has doubled, thanks to my glasses."

Devanand's eyesight and livelihood were saved through the efforts of an innovative microfranchise program developed by the Scojo Foundation, a nonprofit social enterprise that uses market-based solutions to distribute inexpensive corrective glasses in the developing world.

Worldwide, according to Scojo, more than 700 million people who make less than $4 a day suffer from presbyopia, limiting their ability to make handicrafts, read a newspaper or find insects on crops and separate seeds. Sufferers face the dark prospect of diminished productivity and greater poverty.

But through Scojo, reading glasses that in the developed world can easily be found in any pharmacy or corner shop are becoming available to the world's poorest people, giving them the opportunity to regain their livelihoods.

Full article.