World Journal of Social Sciences Vol. 2. No. 1. January 2012. Pp. 182 - 186 Global Financial Crisis and Its Effect on Entrepreneurship Irfan Shahzad 1 , Rosman Bin Md. Yusoff 2 , Kamran Azam 3 and Anwar Khan 4 The paper begins with the discussion about the 2008 global financial crisis which has deepened its routs all across the globe till date, while enlightening its causes and focusing on the question that how long will it prevail and to what extent the local SMEs will be affected. The onset of 2008 financial crises can safely be attributed to the collapse of USA and European housing markets, stimulated by sub-prime mortgage. Housing sector enjoyed boom across USA and Europe during 1998 to 2006. It has been stated that the worst part of the crisis is already over and the markets are suffering from what can be called „the after shocks‟. However, it is argued that normalization of economic activities need “global and semantic” solution; do it and you are out of it. Pakistan has very little foreign exchange left for its disposal and rumors are that the country is at the brink of bankruptcy. Entrepreneurs are affected in large and the crisis has curtailed their access to credit with a higher cost. Similarly, cuts are predicted in R&D, tradeshows, business tours. Therefore, it‟s the time that the Government of Pakistan have to act as a; Regulator, Insurer, Investor, and Lender for SMEs. Field of Research: International Finance. 1. Introduction The paper has conducted a commentary on the discussion of the Global Financial Crisis and its multidimensional impacts include its severe impacts on Entrepreneurs. As Nicholson (2008) acknowledged that financial crisis which instigated from USA has now become a global phenomenon. At present, not only in U.S but across Asia and Europe, stock exchanges crashed; collective losses of the London, Paris and Frankfurt markets alone amounted to more than 350 billion Dollars. Stock Exchange 100 index closed more than 323 points down in January 2008. Bogetic and Balling (2009) discussed this crisis apart from affecting the capitalist economies has distressed the Socialist economy like Russia as well; in May 2008 Russian stock market was fallen by 50% and the Russian central bank had to buy rouble in massive amount to prevent the severe falling against US Dollar. About the cause of crisis, Bartlett (2008) said that crisis was started with the downfall of US sub-prime mortgage industry, the intensity of this collapse was significant; Mark-to-market losses on mortgage-backed securities, collateralized debt 1 MBA Graduate: COMSATS Institute of Information Technology, Attock, Pakistan. Email: shazad.irfan@ymail.com 2 Associate Professor: Department of Human Resource Development (HRD), Faculty of Management and HRD, University Technology, Malaysia (UTM). Email: drrosman@gmail.com 3 PhD Scholar: Department of HRD, Faculty of Management and HRD, University Technology, Malaysia. Assistant Professor: Iqra National University, Pakistan. Email: kamranazamkhan@yahoo.com 4 Lecturer: CIIT, Attock, Pakistan, PhD Student Faculty of Management and HRD, University Technology, Malaysia. Email: anwar_khan@comsats.edu.pk