New Alternative Loan Program for Immigrant Enterpreneurs

New Alternative Loan Program for Immigrant Enterpreneurs

The City of Minneapolis and the African Development Center (ADC) have partnered to offer a new alternative financing program targeted at small businesses in the city. The program  addresses  Islam’s prohibition on paying interest on loans.

At a press conference in Minneapolis to announce the program,  Mayor R.T. Rybak impressed by the business zeal of the Somali and larger African community in the city had no doubt that this new financing program would benefit the city, “The city (Minneapolis) has built equity thanks to African small business owners. This city is the Statue of Liberty for Somalis even in Mogadishu.” 

In the traditional sense African communities have relied not on financial institutions for loans and financing, but on family and friends. Settling in America has been a challenge for many of them. With no credit history in the US, and for some, religious restrictions, it has been difficult to raise capital to engage in business.

For many African immigrants in Minnesota entrepreneurship has become a trade of choice. Hussein Samatar, the founder and executive director of ADC estimates that there are over one thousand African businesses in the Minneapolis/St. Paul Metro Area.

ADC works with African entrepreneurs and homeowners to “start and sustain successful businesses, build assets, and promote community reinvestment.”

Islam prohibits the collection and payment of interest. It is with this in mind that two years ago that Samatar through ADC began working with the City of Minneapolis in establishing a financing program that would allow the growing population of Muslim entrepreneurs whose religion restricts them from receiving traditional interest-based financing. The loan is available to Muslims and Non-Muslims.

“Once the city realized that with alternative financing the end result was the same, everyone got back their money, councilors were less wary of approving the program.

ADC’s success allowed for Shukri Gedi, the program’s first loan recipient, an opportunity to have her clothing and accessory store at Karma Mall expand.

Ms Gedi on her 25,000 business loan, “I can now buy more products and make my customers happy."

Her store appeals to not only Somalis, but other Africans around the cities, especially women shoppers as she sells brightly colored shawls and skirts.

How the Loan Works

•    A private lender provides half the financing at their rate of return
•    The City provides the rest of the financing, upto $50,000, at a 2% rate of return
•    The term of the loan (upto 10yrs) is set by the lender

The African Development Center is at


About Julia N. Opoti

A former Mshale editor, Julia Nekessa Opoti is now the producer and host of the radio show: Reflections of New Minnesotans on AM950 . She also edits/publishes Kenya Imagine

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