Charging interest on money lent is not the same as investing your money and making a profit.The main difference between lending and investing is in the RISK-SHARING.An INVESTOR risks the loss of the ENTIRE investment if the venture doesn't work;The lender's risk is reduced because his loan is often secured, and while that may not guarantee the full value of the principal loaned, added to the interest already earned, it often allows the lender to break-even or make a profit.

Lending money directly to other people who need to borrow it.

There are no banks involved.
Lenders can potentially make more than they normally would by keeping their funds in a traditional investment, by receiving higher rates of interest, directly from the borrowers.