Banned interest will just be turned into preferred equity or interest-free convertible notes. Shariah-compliant sukkuk finance will migrate from the Islamic world to western finance. Ban anything and it merely returns cross-dressing as something else. Credit unions and cooperative banks have always existed in a capitalist system. But they too need a return on capital and to distinguish between more and less risky borrowers to survive.

Lending to risky idea startups with no finished product, minimal or unknown customer discovery or product-market fit makes no sense for investors, and certainly not for risk-averse co-op banks who need to protect their depositors' funds. The idea that investors who have the risk appetite and skill set to nurture and mentor such founders and their ideas are in it only for the money and merely extractive parasites is utter nonsense. No banker will ever have the skill set for gauging the risks involved in this process. Centrally planned finance built on a prohibition model is financial Maoism that's about as viable as its prohibition in the Islamic world and about as viable as prohibiting alcohol was from 1919-33. That said policy measures to tilt the financial system to favor B-corps, social enterprises and co-op banks in order to reverse the socially toxic level of financialization the system has developed since the 1980s, is a good idea. But you can't uninvent financial innovations like options, futures, high frequency trading, credit default swaps, interest futures....I'll stop this long list here.

Anybody who starts a business that scales profitably wants to eventually exit to diversify his own financial risk. The best exit is an IPO into liquid public markets, selling to investors who want to invest only in liquid publicly traded companies. These kinds of markets are another innovation that can't be uninvented. You can't limit entrepreneurs' upside without limiting property rights--ownership, transferability--and we know where that leads.