Why Stearns Bank believes its new hire could improve financing access for underserved communities

A St. Cloud-based bank has hired a local business owner for a new position to improve access to financing for underserved communities.

Mohamed Farah is the community development director at Stearns Bank. The position was created in partnership with the African Development Center, and Farah will split his time between the organizations.

Farah is a St. Cloud State University graduate who's undertaken several business enterprises, including owning a transportation company. The position appealed to him because of his experiences as a business owner.

"I really first-hand understood all those challenges," Farah said.

Stearns Bank Chief Marketing Officer Rory Bidinger said Farah will also have the opportunity to educate community members in a way that empowers them and makes them feel less like they are backed into a corner with their finances.

"Stearns Bank does recognize that there is a wealth gap that we're all aware of... throughout the U.S.," Bidinger said. "But one of the ways that will help to ... bridge and cut that wealth gap down is entrepreneurship and supporting entrepreneurship within immigrant communities or the minority communities, and helping minorities understand their options to try to start a business."

According to Farah, accessing capital is a big barrier affecting not only business owners, but also community members who want to buy a home or a car.

The partnership also involves the Bank of Whittier, which specializes in riba-free (or interest-free) financing, Farah said. This is a type of financing more accessible to Muslims, as riba is a violation of Islamic law.

Farah particularly wants to see the collaboration solve problems for low- to moderate-income families in the community, he said.

Farah has started in his role by engaging with local entrepreneurs, building relationships and working to understand peoples' needs. While his own experience as a business owner and community member is helpful, he wants to broaden that understanding, Farah said.

Part of Farah's role will also involve outreach to other organizations, sharing ideas and opportunities. Bidinger said banks working with nonprofits is one way to address problems like housing, financing and others.

"It's going to take collaboration, and there's power in that partnership," Bidinger said.

Farah will spend about 70% of his time with the African Development Center and 30% with Stearns Bank. The African Development Center is based in Minneapolis but has locations in other Minnesota cities, including St. Cloud, and works to grow business, build wealth and increase reinvestment in the African communities of Minnesota.

In his role, he will also work with communities outside of St. Cloud and Minnesota (Stearns Bank also has locations in Arizona and Florida).

Sarah Kocher is the business reporter for the St. Cloud Times. Reach her at 320-255-8799 or skocher@stcloudtimes.com. Follow her on Twitter @SarahAKocher.

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This article originally appeared on St. Cloud Times: St. Cloud resident takes role to improve financing for the underserved