Islamic Banking and Finance Evolution : A Panacea for Sustainable Development in Nigeria

Abstract

The transformation of the society and the world’s economy on a sustainable basis is one of the most significant challenges in the 21 st century. This implies that one of human kinds greatest challenge in this century is to ensure sustainable, just and balanced development because the needs of the current and future generations cannot be met unless there is respect for natural system and protecting core economic, social and environmental values. Islamic banking and finance with a unique feature of profit and loss sharing paradigm is conducive to a dynamic economy in which the benefits of growth are shared by the community at large. It becomes the focus of this paper therefore to critically examine the Islamic banking concept (non interest banking) as an alternative and viable system that can achieve sustainable development which the 21 st century demands. This paper therefore provides an in depth, state of the art knowledge and insights on the meaning of Islamic banking, rationales for prohibition of interest in Islam, Islamic banking financial instruments and the place of Islamic banking in achieving sustainable development. It is therefore recommended that the numerous advantages accrued to Islamic banking and finance practices which constitutes an integral part of the financial development strategy should be encouraged and mainstreamed to meet need for sustainable development which the 21 st century demands