by Paul Wiseman
A customer showed up at little Devon Bank on Chicago's North Side, asking
for a loan to open a neighborhood shop. But there was a hitch, the would-be
borrower explained: "We can't pay any interest. Can you help?"
At the time, seven years ago, the answer was: "Nope," recalls David Loundy,
Devon's vice president and legal counsel.
That was then. Since fielding that first request, Devon Bank has transformed
itself into a specialist in the kind of no-interest Islamic financing the
customer was seeking. Islamic financing now accounts for more than 75% of
the bank's mortgage portfolio, and Devon has made mortgages compliant with
Islam's sharia law in 36 U.S. states, Loundy says.
Devon Bank, responding to local customers in a neighborhood filled with
Pakistani and Middle Eastern immigrants, stumbled onto something big:
Islamic finance is booming worldwide, fueled by the windfall from sky-high
oil prices and a return to a more strict interpretation of the holy Quran
across the Islamic world. Once Devon Bank introduced sharia-compliant
mortgages and other loans, "People started coming out of the woodwork,"
In a report last month, credit-rating agency Moody's Investors Service said
that the global Islamic finance market has grown about 15% in each of the
past three years and is now worth about $700 billion worldwide. The
heavyweights of global finance have taken notice: Citigroup, HSBC, Deutsche
Bank and others have affiliates devoted to Islamic finance. . . .
"Islamic Banks: A Novelty No Longer," Business Week, August 8, 2005
Aaron MacLean"slamic Banking: Is It Really
Kosher?," American, March/April 2007