The Ruling on Collective Loans
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Question:
Is what is called the association permissible or not? They set aside a sum of money, the amount of which they determine by mutual agreement, to be held by one person each month, and then they draw lots to see who will receive the money for that month. Is this permissible or not?
Answer:
This is what they call a collective loan. It has become common among some employees, and I hold that it should not be done, because it involves commitments and burdens people with debts to several individuals. That is one aspect of it.
The second aspect is that it is a loan that yields a benefit for the lender, because he did not lend to them except on the condition that they lend to him. So it is a mutual lending arrangement. If you say to a person, "I will lend to you on the condition that you lend to me," this is not permissible according to the scholars, because it is a loan that yields a benefit. The Prophet (peace and blessings be upon him) said:Bulugh al-Maram 7:99 Although there is a discussion regarding its chain of narration, the scholars have agreed on its meaning, and that every loan that yields a benefit is riba (usury or interest). This is explicitly stated in the books of fiqh (Islamic jurisprudence) and hadith commentaries, and praise be to Allah.
That is one aspect. The third aspect is that this constitutes two sales in one sale, because it is a contract conditioned within a contract. Since a loan is a contract, if you say to a person, "I will lend to you," that is a loan contract, on the condition that you lend to me. So you have conditioned one contract within another. This is the meaning of "two sales in one sale," which the Messenger (peace and blessings be upon him) prohibited. In any case, this transaction has several dangers, and it should be avoided. If a person needs a loan, there are other ways to obtain it from his brothers. He can borrow from one of his brothers, or from a group of people, borrowing amounts from them and repaying them when he is able to do so. They will have a reward for that, because this is one of the contracts of accommodation intended to show kindness to those in need. Yes.
Is what is called the association permissible or not? They set aside a sum of money, the amount of which they determine by mutual agreement, to be held by one person each month, and then they draw lots to see who will receive the money for that month. Is this permissible or not?
Answer:
This is what they call a collective loan. It has become common among some employees, and I hold that it should not be done, because it involves commitments and burdens people with debts to several individuals. That is one aspect of it.
The second aspect is that it is a loan that yields a benefit for the lender, because he did not lend to them except on the condition that they lend to him. So it is a mutual lending arrangement. If you say to a person, "I will lend to you on the condition that you lend to me," this is not permissible according to the scholars, because it is a loan that yields a benefit. The Prophet (peace and blessings be upon him) said:
(ﷺ) said: "Every loan, which leads to a benefit, is usury."
صَلَّى اَللَّهُ عَلَيْهِ وَسَلَّمَ كُلُّ قَرْضٍ جَرَّ مَنْفَعَةً فَهُوَ رِبًا،That is one aspect. The third aspect is that this constitutes two sales in one sale, because it is a contract conditioned within a contract. Since a loan is a contract, if you say to a person, "I will lend to you," that is a loan contract, on the condition that you lend to me. So you have conditioned one contract within another. This is the meaning of "two sales in one sale," which the Messenger (peace and blessings be upon him) prohibited. In any case, this transaction has several dangers, and it should be avoided. If a person needs a loan, there are other ways to obtain it from his brothers. He can borrow from one of his brothers, or from a group of people, borrowing amounts from them and repaying them when he is able to do so. They will have a reward for that, because this is one of the contracts of accommodation intended to show kindness to those in need. Yes.
Source
قناة «العلامة الدكتور صالح الفوزان»، هل ما يسمى بالجمعية يجوز؟ يضعون مالا يحددونه في كل شهر، ثم يقرعون كل شهر، فيأخذ أحدهم المبلغ؟ — youtube.com
The Arabic text is a machine transcription of the audio recording.