Journal of Money & Economy
Volume:5 Issue: 3, Summer 2009

Micro financing is providing financial services and resources for low-income people to improve their financial situation. In many less developed countries, providing these services for low-income classes was next to impossible due to high interest rates and heavy collaterals and guarantees that banks and other credit institutions demand. Micro financing was used since 1960s as a fundamental approach to eliminate these barriers and could relatively provide credit and financial services to lower income and poorer populations. However, large groups of Muslim population, who prefer Islamic based financing for themselves and their families, do not have access to such financing. Considering this issue and the limitations in Islamic societies face in using financial services, this paper tries to propose a model of Islamic Shariah-based model of Islamic micro financing, suitable with the financial and credit needs of lower income Muslim societies.

The paper aims to investigate empirically the effects of several types of financial restraints on financial development for the case of the Iran. Two hypotheses addressed and discussed in the context of the McKinnon/Shaw and the monopoly bank model. A conditional co-integration model has been employed to carry out the empirical investigations. The long and short-run analysis show that financial restraints in general as well as ceilings on lending rates have had a negative effect on financial depth in Iran, supporting that the financial restraints policy has hindered rather than helped financial deepening. Therefore, in the context of the financial system imperfections (the monopoly bank model) which is the case in Iran, the finding could be interpreted that the authorities have used a severe financial repression policy which has caused a negative effect on financial development rather than developing financial intermediation. In addition, our findings show that the per capita output is not weakly exogenous with respect to financial development, stating that financial development may bring economic growth in the long-run. Thus, policies that affect financial development are also likely to influence economic growth.The main implication of this paper is that if the government continues to tighten financial restraints in the banking sector, this policy does not develop financial sector; therefore, it may damage the economic growth which is the main aim in the FYDPs.

After the revolution of 1979, all of the private banks existing in Iran were nationalized and the economic system was based on public, cooperative and private sectors and banking operations were categorized in public sector. Consequently, private sector and foreign banks were bared from doing banking operations in Iran. According to the recent laws and regulations passed in Iran, the Iranian private sector have been permitted to do banking operations in Iranian mainland and foreigners have been allowed to do so in Iranian free zones. With regard to the importance of the subject, the regulations prevailing in Iranian mainland and free zones shall be examined.

This paper provides a brief technical survey of the historical national accounts of Iran. Gaining access to longer-term time series in compliance with concepts, classifications and standards comparable to the present one help fulfill quantitative studies in the area of business cycles. Despite the shortage of reliable, standardized and classified information, the methodology applied in this paper could present data for a 70 year period, including the existing 48 years time series which is available now. The historic endeavors of the pioneer researchers in the field of the system of national accounts, despite certain ambiguity and shortcomings, have been gateway in the context of historical data, compilation.

In winter 1383, the center for Research of Majlis Shura Islamic of Iran (CRMSII) published a proposal on the logic of the prevailing profit rate that the commercial banks pay/charge on long-term bank loans requiring the executive branch of Islamic Republic to lower the average rate of profit by 4.5 percent within 18 months of passage of the bill by Majlis, to reduce government budget deficit by 20 billion rials, to reduce another 4% in the profit rates all within two years after passage of the bill and to provide quarterly report to the Majlis on implementation of the law by the executive branch. In what follows, I would state and examine both empirically and theoretically, the validity of the arguments in support of legislative action on defending the rates of profits charged and paid by the banks.

In this research, a model is designed to assess the effect of banking facilities over private sector investment. In this model, private investment is a function of non-oil GDP, and with a time lag, of import of capital; goods, investment of public sector and the real facilities granted by the banking system to the private sector. The effects of the model indicate a meaningful effect of the real facilities to the private sector. Meanwhile, the model is tested for its ability to explain independent variables and complies with the real values of the variable in the assessed years with a 5% error level.

Financial system of B&H is “bank dominated”, which means that banks (credit institution) is dominated financial institutions in the financial system. Banks have major role in financial intermediation process between deficit and surplus money unites. Having on mind specific features of financial systems in Bosnia and Herzegovina it’s important to analyses characteristics each segment of financial system, specially banking sector, and identify which elements can have impact on stability and safety of financial sector. Only stabile financial system can ensure real economy stability. Indirect role in stabilisation national economy have central bank through managing financial stability and cooperating with national government. Currency board system put some barriers on central bank role in managing financial stability. So author in this paper will be analyses structure of BH financial system, to identified internal and external risk in banking sector, role of CBBH in managing financial stability, and analyses possible solutions in field of monetary policy and supervision for that purpose.