Let’s get the pleasantries out of the way first. The full code and simulation files are here: https://github.com/AriqAhmer/banking-system-modelling. So if you feel like skipping this blog and jump straight to the code, then go ahead. You’ll find all the necessary assumptions and logics there.
Now the rest of the story…
The Long Wait…
It took waaaaaay longer than expected to post this update, not because the model itself was complicated but… but… I simply couldn’t find time to do it. I’ve been busy a lot lately with unemployment, that’s why I managed to pass the time by doing this.
The Content
This time, the comparison was done using very basic profit-expense-reinvestment scheme. The purpose of this simulation was to take a look at the payment period needed to overcome the debt incurred by the business after taking a loan from the bank. Assumptions are that the Islamic Bank is using the Mudarabah model while the Traditional Bank is using the Compound Interest model.
This post is mainly to update about this whole research and come up with a simulation model that I can use further for this ongoing research. Sadly the analytic approach is still in progress, and I’ll see how to proceed with it in the future. For now this is what I have come up with.
Feel free to check it out and play with the model and give me a feedback on any improvements I can make or any mistakes I can fix.
–A A