Modern theory emphasizes that growth is found in solving the foundational dilemma of economics: how to satisfy unlimited needs with limited resources. In the debate, it also argues the importance of knowledge as an essential element of growth.

Credit allows companies access to tools they need to produce the items we buy. A business that couldn't borrow might be unable to buy the machines and raw goods or pay the employees it needs to make products and profit. Credit also makes it possible for consumers to purchase things they need.

Credit helps in increasing economic activities of a country; thus, helps in its development. If credit is made available to the poor people at reasonable rates, they can improve their economic condition. It will further improve their standard of living and overall development.

Credit Control is a role of the central bank, which regulates credit, or the supply and the demand of money or liquidity in the economy. The central bank controls the credit extended by commercial banks to their customers through this function.

Conclusion:

Study the real monetary policy (behavior) of the respective central bank, not the legislative justifications and official rhetoric.

Principally, ethical finance and interest (credit) are more sustainable (win/win) , but the speed of growth is statistically lower than in predatory economic models.

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PS.

There is a biblical (theological) distinction between lending to those in need, for their need, as opposed to lending for some business purpose; the Hebrew terminology specifically refers to usury: the charging of unfair levels of interest; one who lends to invest reasonably is allowed to expect a return on his money; those who lend to the needy and poor should not expect to profit from that charity. Finally, a consistent lifestyle of godliness in monetary affairs will act as a form of self-protection to avoid falling into sin and evil.

Menzie Dlamini There are several Islamic funding models; you have to check the policy model of the respective country. Some of the modes of Islamic banking/finance include Mudarabah (profit-sharing and loss-bearing), Wadiah (safekeeping), Musharaka (joint venture), Murabahah (cost-plus), and Ijara (leasing). Islamic finance is based on a belief that money shouldn't have any value in itself. It's just a way to exchange products and services that do have a value. Linked to this way of thinking about money, is the idea that you shouldn't make money from money, i.e. it affects the speed of growth, not growth per se (as mentioned above).

Stephen I. Ternyik

I don't know anything about Islamic finance but I find your remark that it is "based on a belief that money shouldn't have any value in itself" very interesting, as well as somewhat puzzling. Doesn' t currency always have a cost related to its physical form? Production of currency and/or handling thereof has a cost independent of its purchasing power. Doesn't that give money some sort of "value in itself"?

Karl Pfeifer The statement that money should not have a value in itself is the general formulation of Islamic finance.

In any case, you seem to mean that there must be involved a cost to issue money:

https://www.federalreserve.gov/faqs/currency_12771.htm

The value of money itself is determined by the demand for it, just like the value of goods and services. You can measure the value of money by what people will exchange for it and by how much of it there is. Private banks create money by lending excess reserves to consumers and businesses. This, in turn, ultimately adds more to money in circulation as funds are deposited and loaned again.

You also have to consider four types of money:

• Fiat money – the notes and coins backed by a government.
• Commodity money – a good that has an agreed value.
• Fiduciary money – money that takes its value from a trust or promise of payment.
• Commercial bank money – credit and loans used in the banking system

Also important: The ‘value of money,’ (i.e. the amount of abstract labor time the monetary units represent), is defined as the ratio of the total direct labor time expended in the period to the total money income—which, of course, is the reciprocal of the ‘monetary expression of labor’.

The basic concept behind time value of money is that an amount of money earned earlier is better than that earned tomorrow; this has immense consequences in today’s life.

Stephen I. Ternyik

I also meant that handling money incurs a cost. Many merchants nowadays charge credit and debit card users a bit extra, but it seemed to me that handling cash involved more labor and time. The cash has to be counted, transported, etc. I do realize electronic handling also incurs costs, but I imagine matters are not optimal. Small merchants are basically discounting their (or their employees') labor and time in preferring cash.

Yes Karl Pfeifer the handling of money incurs transaction costs.

Transaction costs are one of the key determinants of net returns;

they are only incurred when purchases or sales are made; ongoing fees are charges related to the passage of time. In most cases, transaction fees cannot be eliminated.

Stephen I. Ternyik

Here's an interesting factoid:

"The 2022 Consumer Payments Survey reveals that the ongoing decline in cash use in Australia has accelerated since the COVID-19 pandemic. The share of in-person transactions made with cash halved, from 32 per cent to 16 per cent, over the three years to 2022. The decline in cash use was particularly pronounced for smaller payments; cash is now used less than electronic methods for all transaction sizes." — https://www.rba.gov.au/publications/bulletin/2023/jun/cash-use-and-attitudes-in-australia.html

A year or so ago, I had to leave a restaurant because they would not accept credit or debit cards. Now there are merchants who don't accept cash. Some banks here have recently talked about charging ordinary patrons extra fees for handling cash (businesses already pay fees for cashbag deposits).