ABSTRACT
Since the early years of economic development theory in the 1950s, there has been a good deal of debate about whether finance simply responds to the needs of enterprise or if the emergence of financial institutions is actually able to promote business and entrepreneurial activity.1 In the former view, the role of finance is essentially a passive one, with banks and other financial institutions growing as the economy expands. In contrast to the demand-following view, the supply leading approach holds that the availability of substantial funding, perhaps at low cost, may stimulate entrepreneurial effort and encourage business ambitions. The top managers of financial institutions may themselves play an entrepreneurial role, perhaps because they are also company directors.2 This was certainly experience in East and South-East Asia, one that proved successful in promoting high rates of economic growth, at least until the Asia crisis of 1997, which resulted in accusations of 'crony capitalism'.
