What is the ruling on employee associations?

Question : He asks: What is the ruling on the savings groups that some people form, where a group sets aside a sum of money each month, and one of them takes that sum, and so on until everyone has received their share?

Answer : Well, the term "savings group" in reality does not indicate its meaning, which is that the group consists of employees who deduct a portion of their salary each month for one of them, let us say number one. In the second month, they deduct it for number two, and in the third month for number three, until it rotates among them. This savings group is good, cooperation, and a blessing, and how much it has met the needs of those in need. For if we assume that there are ten people, each putting in a thousand, what does the one who receives it gain?
Ten thousand plus his own thousand. It may meet his need and spare him from borrowing from banks or others who break his back with heavy debts. It is not included in the statement of the jurists that "every loan that brings benefit is riba (usury or interest)," meaning there is no benefit here. He put out a thousand and how much will come back to him? A thousand. He did not gain anything. Yes, it certainly meets a need, but every loan meets a need. So it is among the praiseworthy matters of cooperation. We ask Allah the Exalted to make us and you all cooperative in righteousness and piety. And with this, this meeting ends, .