He wants to take out a loan with interest to set up a business that will benefit poor Muslims

Praise
be to Allah

Dealing with interest is a major sin, concerning which there
is a stern warning and threat to the one who does that.

Allah, may He be exalted, says (interpretation of the
meaning):

“O you who
believe! Fear Allah and give up what remains (due to you) from Ribaa (from
now onward) if you are (really) believers.

And if you
do not do it, then take a notice of war from Allah and His Messenger but if
you repent, you shall have your capital sums. Deal not unjustly (by asking
more than your capital sums), and you shall not be dealt with unjustly (by
receiving less than your capital sums)”

[al-Baqarah
2:278-279].

And Allah, may He be exalted, says (interpretation of the
meaning):

”Those who
consume Riba will not stand (on the Day of Resurrection) except like the
standing of a person beaten by Shaytaan (Satan) leading him to insanity.
That is because they say: ‘Trading is only like Riba,’ whereas Allah has
permitted trading and forbidden Riba. So whosoever receives an admonition
from his Lord and stops consuming Riba, shall not be punished for the past;
his case is for Allah (to judge); but whoever returns (to Riba), such are
the dwellers of the Fire — they will abide therein.

Allah will
destroy Riba and will give increase for Sadaqaat (deeds of charity, alms).
And Allah likes not the disbelievers, sinners.”

[al-Baqarah 2:275-276].

Muslim (1598) narrated that Jaabir (may Allah be pleased with
him) said: The Messenger of Allah (blessings
and peace of Allah be upon him) cursed the one who consumes riba and the one
who pays it, the one who writes it down and the two who witness it, and he
said: they are all the same.

So it is not permissible for the Muslim to take out a loan
with interest and oppose Allah, may He be glorified and exalted, even if
that loan is for the purpose of doing a righteous deed, such as building a
mosque or a school for memorisation of Qur’an, or to help the poor and
needy, and the like. For Allah is Good and does not accept anything but that
which is good.

Riba is one of the gravest of prohibited things, so it is not
permissible for a Muslim to take the matter lightly or to do it, whether
that is for the purpose of helping poor Muslims or any other cause.

Ibn al-Qayyim said: The prohibition on
Riba an-Nasee’ah [which means that the amount of debt is
increased when the debtor is unable to pay off the debt at the appointed
time and requests extra time in which to pay it off] comes under the heading
of prohibition of ends that are in and of themselves haraam; the prohibition
on riba al-fadl [which refers to when similar commodities are exchanged
unequally, such as one measure of dates for two measures of a different
quality of dates] comes under the heading of prohibition of means. Hence no
kind of riba an-nasee’ah is permitted. See: I‘laam al-Muwaqqi‘een
(2/107).

Riba an-nasee’ah is the basis on which banks operate (lending
with interest).

Seeking to do good and righteous deeds, and to bring relief
to the poor and needy, cannot be achieved by indulging in sin and evil. A
small amount of blessed and halaal trade is better than a great deal of riba
that is subject to destruction. Allah, may He be exalted, says
(interpretation of the meaning):

“Allah will destroy Riba”

[al-Baqarah 2:276].

It was narrated in Musnad al-Imam Ahmad (3672) from
Ibn Mas‘ood (may Allah be pleased with him) from the Prophet (blessings and
peace of Allah be upon him): “And no person who
acquires wealth from haraam sources and spends from it will be blessed in
it, and if he gives it in charity it will not be accepted from him, and if
he leaves it behind, it will be his provision on his journey to Hell. Allah,
may He be glorified and exalted, does not erase a bad deed by means of
another bad deed; rather He erases bad deeds by means of good deeds. Evil
does not erase evil.”

Classed as saheeh by ar-Daaraqutni in a mawqoof report. See
Haashiyat Tahqeeq al-Musnad, ar-Risaalah edn. (6/189).

The scholars of the Standing Committee for Issuing Fatwas
were asked: there is a man who has some money, and he wants to put it in a
bank. He knows that the bank will give him some interest, but he is aware
that this extra money is riba and is haraam. If he leaves it, the bank will
take it and make use of this riba. Is it permissible for him to take the
riba and give it to some poor families without seeking any reward, only so
that the families will benefit from this money, because they are in urgent
need of money, and that would be instead of the bank making use of it?

Answer:

It is not permissible to put money in riba-based banks with
the aim of taking the interest, no matter for what purpose, because Allah
has prohibited riba and has issued a stern warning against it, and the
Prophet (blessings and peace of Allah be upon him) cursed the one who
consumes it, the one who pays it, the two who witness it and the one who
writes it down. So it is not permissible to take it with the intention of
giving it in charity, because it is evil and haraam earnings, and Allah is
Good and does not accept anything but that which is good.

End quote from Fataawa al-Lajnah ad-Daa’imah, 13/355.

And Allah knows best.