Islamic Endogenous Loans

The present options for an economy all have serious weaknesses and, in any case, the way forward for Islam must be completely distinctive. Fortunately, Islamic opposition to riba enables a distinctive new way which addresses the real economy, furthers justice and ends foreign financial colonialism. The new way uses Islamic endogenous loans. These are state‐issued, repayable, interest‐free loans which are generally administered by the banking system on market and private property principles. The loans are counter‐inflationary and are always directed at productive capacity. Because they bear no interest, the loans create productive capacity at one half, or less, of the present cost for:— • Public capital investment — hospitals, roads, bridges, etc. • Private capital investment as long as such investment creates new owners of capital and is part of policy to enable all individuals to become owners of productive capital. • Environmental capital investment • Small and start‐up businesses