THE ROLE OF ISLAMIC BANKING IN SOCIOECONOMIC DEVELOPMENT

The Economic and Social Development is the challenge facing all countries in the Islamic world as a whole belongs to the group of underdeveloped countries. All economists are in agree that the development process needs to be the burden of funding at all stages, as well promote community recovery from economic and social underdevelopment requires the mobilization of all forces in the material and moral. The banking system in any country has an important and effective role in mobilizing community resources and push toward the achievement of development goals to which to aspire, and when the banking system in accordance his dealings with the believes and aspirations of the people whenever they have more responses and thus the effectiveness of this device in the payment of the development process stronger and greater. That clearly demonstrates the important role that could be played by Islamic banks to achieve the aspirations of the Islamic countries and people of the progress and stability. The development of the global Islamic finance industry in the past two decades has been remarkable. It can be easily point out that there is a progress in the Islamic finance and economics studies, whereas Islamic banking is an investment and financing concept which expands globally. People are becoming more aware of the Islamic banks. However, it is different from conventional banking in most aspects, since its close tie to religion is very important. The connections to politics and history have influenced the implementation of this system in the countries where the system operates. Islamic banking has achieved great success in proving the theory of Islamic financing as they are to keep pace with the times and respond to the funding needs required by the contemporary economic life. The Islamic banks have proved that the right of Islamic banking can keep up with the latest developments in the world of finance, economy, characterized by the benefits of genuine interest-based financing and serve as a basis for the domestic financial system and global degree of professional banking and flexibility and to cover the financing needs of contemporary society. This dissertation aims to clarify the issue of Islamic Banking and to describe the Islamic banking system and how it is implemented in some selected countries; in addition it evaluates the performance and efficiency of these banks to know its impacts on economic and social development. The thesis is structured as follows: chapter one discusses the concept of Islamic banking and its historical development, chapter two evaluates the performance of Islamic banking, chapter three explains the role of Islamic banking in the socioeconomic development and concludes.