An Islamic law enacted centuries ago was an obstacle for modern Minneapolis businesses until Minneapolis partnered with an African business resource group to allow Muslim business owners a way to both comply with their beliefs and invest in their businesses. Since April 2007, the city of Minneapolis, in partnership with the African Development Center, has given out 38 loans in a way that is compliant to Islamic law by using a fixed rate in place of a variable interest rate. Through the system, called the Alternative Finance Program, businesses pay a set rate of return, which corresponds with Islamic practices. The program is a slightly altered version of the common âÄúTwo-PercentâÄù loans also offered by the cityâÄôs Department of Community Planning and Economic Development. âÄúIt really amounts to the same thing,âÄù Bob Lind, CPED director of business finance, said. âÄúBut itâÄôs âĦ just a different way of looking at it.âÄù Recipients of the loan operate businesses that lie mainly in the Cedar-Riverside neighborhood and along Lake Street, âÄútypical strongholds for the Somali community,âÄù Lind said. Five of the loans went to businesses that are part of a Somali marketplace in the Cedar-Riverside area. Said Karie, who works at Hijaz Clothing in the marketplace, explained that âÄúeverything that has [an] interest rate is actually a sinâÄù for Muslims. âÄúItâÄôs been that way for years and years,âÄù Karie said. The rule extends beyond just loans, as Muslims who follow the religion strictly will go as far as returning interest gained on savings to the bank or a charity, said Abdirahman Omar, general manager of Mustaqbal Computer Center. âÄúPersonally, I wouldnâÄôt take it [interest] even if I needed it,âÄù Omar said. The rule also preserves reliability in rates, Karie said. Instead of using an interest rate that will vary according to the market, the fixed rate used for the Alternative Finance loans is consistent, he said. Many loans have gone to businesses that reflect the Muslim culture, such as Middle-Eastern restaurants and Halal meat stores, where food, like the loans, abides by Islamic law. However, loans have also gone to other various retailers, such as computer, clothing and book stores. The Mustaqbal Computer Center used a $75,000 loan to invest in wholesale computers, Omar said. The loan program is a response to the wave of Middle Eastern and East African immigrants in recent years, Lind said. âÄúWeâÄôre just trying to work with those new immigrant populations to try to provide assistance and financing just like we would for anybody with the last name âÄòSmithâÄô or âÄòJohnson,âÄô âÄù he said. Partnering with the Minneapolis-based African Development Center, CPED has distributed almost $1.5 million to the businesses, with loans ranging from $10,000 to $150,000. Most fall between $10,000 and $20,000, Lind said. He added that loan recipients have been good clients of the city; âÄú[they] tend to borrow as short a term as possible [and] pay it back as quick as possible,âÄù Lind said. Before the program, businesses were unable to get loans because of these religious beliefs, and they would turn to raising money internally, Lind said. The program is a pathway for business owners to âÄúachieve the American dream of creating wealth,âÄù Lind said. He added that Minneapolis is the first city, to his knowledge, to adopt a Shariah-friendly loan program. He sees the cityâÄôs version as becoming a model for others in the future.