Islamic loans give businesses an interest-free option to follow religious law

FARGO - When Bille Abyan needed financial help opening the Fargo Halal Market, he sought out a loan that, like the food he planned to sell, would comply with Islamic law.

Bille Abyan stands behind the register Tuesday, Oct. 21, 2014, in the Fargo Halal Market at Ninth Avenue South and 45th Street. Abyan, a co-owner, opened the business in 2012 with the help of an interest-free loan that complied with the rules of Islam. Archie Ingersoll / The Forum

FARGO – When Bille Abyan needed financial help opening the Fargo Halal Market, he sought out a loan that, like the food he planned to sell, would comply with Islamic law.

Abyan’s Muslim faith required that the loan be interest-free, so he turned to the Immigrant Development Center – apparently the only lender in the Fargo-Moorhead area offering small-business loans that follow the Islamic code known as Shariah, which forbids paying or receiving interest.

“It’s a sin, absolutely sin,” said Fowzia Adde, the IDC’s executive director.

Adhering to Shariah is so important to 40-year-old Abyan, the market’s co-owner, he said that if he had to choose between closing his business and paying interest, “We would close, if those the two options you gave.”

Although there’s no interest, Islamic loans do come at a price. For instance, if a business needs money to buy $2,000 worth of equipment, the IDC purchases the equipment for the business, and over time, the business pays back the $2,000 plus an agreed-upon profit for the IDC, Adde explained.


In the IDC’s case, that profit is equivalent to the amount of interest paid over the life of a conventional loan that has an interest rate of 5 percent or less.

“It’s very close to interest,” she said of the Islamic loan method the center uses.

The IDC, a nonprofit organization funded through grants and donations, was established in Moorhead, Minn., in 2003. Since then, the center has given out 16 loans to the businesses of immigrants and refugees, Muslims and non-Muslims alike, totaling $220,000, Adde said.

“The people we work with are very smart,” she said. “They’re very eager, and their business explodes right away. You just need to give them a push.”

Three of the IDC’s loans, a total of $27,000, have been Shariah-compliant. Aside from the Fargo Halal Market, an African restaurant and a cleaning business have received Islamic loans.

It’s a service the IDC provides because there’s a need, Adde said. “We go with the flow with the client. We are here … to close the gap.”

Much like the IDC, the African Development Center in Minneapolis offers Islamic business loans ranging from $5,000 to $300,000. “African Development Center is giving opportunity for people who would never have the opportunity otherwise,” said Ayan Abdinur, a program administrator for the center.

A survey of several lenders in the Fargo-Moorhead area, including Gate City Bank, Bell State Bank & Trust, Wells Fargo, Town and County Credit Union, found that none offered business loans or home mortgages that obey Shariah. For such mortgages, Fargo-Moorhead residents have to find lenders outside the area, said Darci Ashe of Lutheran Social Services, a nonprofit group that helps refugees settle here.


The Fargo Halal Market, which opened in 2012 at Ninth Avenue South and 45th Street, caters to the city’s Somali refugees by selling goods that abide Islamic dietary laws, which prohibit pork and booze and require that animals are properly slaughtered.

Abyan, who came to the U.S. from Somalia in 1996, said his reasons for having an interest-free business loan are religious but also practical. He said that if his customers ever learned he was paying interest, they would shun his market.

“There’s no way they buy something from you,” he said.

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