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Attitude towards Interest-free Financing among Small Traders and Farmers in Multan

Author

Listed:
  • Mohammad Aslam

    (Bahawalpur Division, Bahawalpur.)

  • Toseef Azid

    (Department of Economics, Bahauddin Zakariya University, Multan.)

  • Shahnawaz Malik

    (Department of Economics, Bahauddin Zakariya University, Multan.)

Abstract

It is frequently asked whether the modern economy can function without interest. This question has acquired some urgency in wake of the recent ruling of Supreme Court banning interest in Pakistan. In this respect every expert has his own opinion. Some pronounced that great harm will result from the banning of interest. Others have the opinion that such pronouncement is based on lack of understanding of the modern economic system, as well as the nature of the Islamic prohibition of interest. However, the banning of the rate of interest has affect on the economic activity, i. e. especially on the small traders and farmers. It is commonly argued that this change in capital market has two important effects on the economy. It increased the capital supply while price reduces, thus improving efficiency. And it makes also possible to produce more with relatively less cost, thus has positive effect on the growth of the economy.

Suggested Citation

  • Mohammad Aslam & Toseef Azid & Shahnawaz Malik, 2000. "Attitude towards Interest-free Financing among Small Traders and Farmers in Multan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 39(4), pages 663-672.
    • Handle: RePEc:pid:journl:v:39:y:2000:i:4:p:663-672
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    References listed on IDEAS

    as
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    4. Joan Robinson, 1953. "The Production Function and the Theory of Capital," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 21(2), pages 81-106.
    5. Bandar al-Hajjar & John R. Presley, 1996. "Small Business in Saudi Arabia," Palgrave Macmillan Books, in: J. W. Wright (ed.), Business and Economic Development in Saudi Arabia, chapter 7, pages 105-126, Palgrave Macmillan.
    6. Zaman, Arshad & Zaman, Asad, 2001. "Interest And The Modern Economy," Islamic Economic Studies, The Islamic Research and Training Institute (IRTI), vol. 8, pages 61-74.
    7. Frank H. Knight, 1936. "The Quantity of Capital and the Rate of Interest: II," Journal of Political Economy, University of Chicago Press, vol. 44(5), pages 612-612.
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