In an economy with a bank-based financial system (little or no stock market activity allowed), I think I've got this much down:
The banks lend to businesses, who then make products and services. The businesses pay their suppliers according to the market rate. In other words, the businesses share their piece of the pie with suppliers according to how valuable they think the supplier is to them.
However, I'm not quite sure how the banks determine how much the businesses should get for their efforts. I am assuming that the banks don't compete among themselves to sell loans to the businesses. The dividing of the pie between the banks and businesses in this case seems rather arbitrary. I know the banks simply expect an interest on their loan money, but it seems like the fixing of the interest rate seems arbitrary. Is it based on perceived risk of the industry in which the business operates? How would this risk be calculated for emerging industries, where there is little or no information?