Islamic finance is widely available throughout the Muslim world, but is rare in the United States, says Yahia A. Rahman, who bought the bank in 1982 and five years later opened a related financing operation, Lariba American Finance House, to handle mortgages and small business ventures. Deals are structured so that the bank buys into the venture with the entrepreneur, who runs the company and buys the bank out, with payments structured so that the bank is compensated for its investment. Profits and losses are shared; the overall cost tracks with a traditional loan repayment at a standard interest rate.
“Our model is that we do not rent money,” says Rahman, who spent most of his career as an engineer in the oil and gas industry.”We do not charge interest; we look at every deal as an investment deal.”
Such a model may become more popular as the population of Muslims in the U.S. booms. Estimated at 2.6 million in 2010, a 2011 Pew Research Center report projects that the number of M