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'Halal' Financing for Muslim Entrepreneurs Gains Currency

A Pakistani-American family-owned gift shop in Brooklyn
A Pakistani-American family-owned gift shop in BrooklynPhotograph by Robert Nickelsberg/Getty Images

In mid-2009, Pakistani immigrant Junaid Akbar struck out at a host of major banks when he sought funding to buy bagel shop franchises in the Dallas-Fort Worth area. Then, in early 2010, the retired computer programmer landed just over $500,000 from an unusual source: Bank of Whittier, a tiny community bank in Los Angeles that specializes in financing for Muslims who want to comply with Islamic anti-usury laws that prohibit the paying or charging of interest.

The bank, whose staffers speak more than a dozen languages, markets itself to observant Muslim entrepreneurs trying to stay within the boundaries of Shariah, or Islamic law. Its clients include owners of gas stations, supermarkets, and restaurants. Even though avoiding loan interest wasn’t his priority, “they came and helped us out,” says Akbar, who now owns four Einstein Bros. Bagels outlets. “I applied so many places, but they took a chance on me.”