African Journal of
Business Management

  • Abbreviation: Afr. J. Bus. Manage.
  • Language: English
  • ISSN: 1993-8233
  • DOI: 10.5897/AJBM
  • Start Year: 2007
  • Published Articles: 4188

Article in Press

Interest Mechanism Importance for Society, Bank’s progress & Economy with Reference of Islamic Society


  •  Received: 06 January 2017
  •  Accepted: 20 March 2017
This study was conducted to analyze the interest mechanism implemented in Islamic societies and its impact of society and banks progress. This study examined interest mechanism from four perspectives (Social Norms and Values, Social Wellbeing, Economic progress and Sharia) and Islamic banking was compared with conventional banking system. The progress was being compared with literature support and origin of interest is being explained. To find out the research result we used quantitative research technique and collected data by use of questionnaire method. SPSS was used to analyze the results of collected data. We found a strong relationship between interest mechanism and its impact upon the society and economy. Those economies progress where the banking system is accordance with societal norms and values and the one where double banking system follows fails to ensure users. Banking plays a vital role in interest mechanism and development of economies because they facilitate the society and industry. Sharia is the main source to clarify the misunderstanding between banking system and users because they depend on sharia as source based upon Quran and Sunnah. Islamic banking should be supported by government in Islamic societies to have better, trust able and preferable banking system.