Islamic Finance works with the help of different tools such as Murabaha, Musharka, Ijara etc. They are not interest based they are profit oriented & in Islamic Finance Banks bear the maximum risk which is not their norm but they have to do it because Shariah advice them to do such act.
Conventional banks earn money through margin spread by taking deposits form public enlarge and advancing loans to the companies limited.
Islamic banks earn money through mutual investment deposits and special investment deposits by taking an agreement through the investors.
Islam justifies it on equitable basis. i.e. you can get money for investment but should make the bank partner in whatever business that you are doing. Islamic banks when offer you funds in fact participate in your business as a partner, where you and they invest on equitable basis. Profits/Losses are shared as the business performs (not fixed).
Islamic finance is the best tool as bank will study your proposal, your experience in the field, history and if deemed attractive they will offer you finance just as a partner. This is a good way of prosperity in a country as the business proposal will need to be feasible, legitimate; employment generating, fruitful and both parties will get their shares from the outcome accordingly. Islamic banks also offer management services in the companies (two minds think better than one). Bank will not just lend money to make money as they normally do by taking collateral from people in shape of property and giving funds.
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