The general perception of Islamic finance is that it prohibits the practice of paying and receiving interest, but Islamic finance is much broader than interest rate prohibition. Islamic financial services can be viewed as a set of financial services which are diversified based on the needs of society.
Since in THE Iranian Economy most of the enterprises are micro and/or small, micro financing seems to be very important. Among different modes of financing which are designed in Iran’s Interest Free Banking System, Qard Hasan has been discussed in this paper as a way of micro financing.
With a brief review of Iran’s latest Banking Act, a history of Qard Hasan has been presented and due to data availability the performance of the Iran Agricultural Bank (Bank Keshavarzi) has been discussed in this regard.