Islamic economic system: from principles to microeconomics and macroeconomics fields (38)

Continuation

Parting itself from interest, Islamic bank encourages profits from:

o   trading;

o   and commerce

which are created via:

§  mutual trade;

§  and cooperation

while by means of profit-sharing and risk.

Profits are created through the demand-driven equity investment:

o   mudharabah;

o   and musharakah.

The latter can promote:

ü productivity;

ü and creativity

as it is directly involved in real production and the provision of value-added goods.

Used from paper of Abdul Ghafar Ismail and  Noraziah Che Arshad