The Ruling on Participating in Financial Associations
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The questioner:
Among the questions that came in is this one, O Shaykh. The questioner, Abu Khalid, asks: What is the ruling on individuals who form this type of association among themselves in their work? Each member of the association puts in a sum of money, and at the end of each month these funds are collected and taken by one person, rotating among them within the same year.
The Shaykh:
By Allah, many of our scholars have permitted this, and a decision was issued by the Council of Senior Scholars that it is permissible. However, I do not see it as permissible; I do not see it as permissible, because they did not lend to them except on the condition that they lend to them. So it is a lending association where each party lends to the others on the condition that they lend to them. And if a loan is conditional, it is not lawful and not permissible. Yes.
The questioner:
Does it apply to it, O Shaykh Salih, that every loan that brings benefit is riba (usury or interest)?
The Shaykh:
Yes, it is the same thing. Every loan that brings benefit is riba. He did not lend to them except on the condition that they lend to him and that the circle rotates so he receives these collected sums. He did not lend to them for the sake of Allah to expand their means, nor did he impose a condition of benefit on them. The Prophet (peace and blessings be upon him) said, “Every loan that brings benefit is riba.” So it falls under this, because it brought benefit to the lender, since he did not lend to them except on the condition that they lend to him. Yes.
Among the questions that came in is this one, O Shaykh. The questioner, Abu Khalid, asks: What is the ruling on individuals who form this type of association among themselves in their work? Each member of the association puts in a sum of money, and at the end of each month these funds are collected and taken by one person, rotating among them within the same year.
The Shaykh:
By Allah, many of our scholars have permitted this, and a decision was issued by the Council of Senior Scholars that it is permissible. However, I do not see it as permissible; I do not see it as permissible, because they did not lend to them except on the condition that they lend to them. So it is a lending association where each party lends to the others on the condition that they lend to them. And if a loan is conditional, it is not lawful and not permissible. Yes.
The questioner:
Does it apply to it, O Shaykh Salih, that every loan that brings benefit is riba (usury or interest)?
The Shaykh:
Yes, it is the same thing. Every loan that brings benefit is riba. He did not lend to them except on the condition that they lend to him and that the circle rotates so he receives these collected sums. He did not lend to them for the sake of Allah to expand their means, nor did he impose a condition of benefit on them. The Prophet (peace and blessings be upon him) said, “Every loan that brings benefit is riba.” So it falls under this, because it brought benefit to the lender, since he did not lend to them except on the condition that they lend to him. Yes.
Source
قناة «العلامة الدكتور صالح الفوزان»، [3485] حكم الاشتراك في الجمعيات المالية - صالح الفوزان — youtube.com
The Arabic text is a machine transcription of the audio recording.