The Ruling on Cooperative Associations Among Employees
Machine translationRead the Arabic original
The questioner:
What is the ruling on a cooperative association among employees or teachers, where one person takes the money each month? Is this riba (usury or interest)? Because we heard in the year 1408 that Your Eminence said that this is forbidden and not permissible, and we heard in the year 1410 that Your Eminence said in the magazine al-Da'wah that this is permissible. So what is the correct position?
The Shaykh:
Associations that agree on a loan, where each person contributes one thousand or two thousand riyals, we used to dislike that, because it involves a loan contract with a loan, and we advised leaving it off as a precaution. Then it was discussed in the council of the senior scholars, and the majority of the council saw that there is no harm in it, if Allah wills; because there is no increase in it, rather each person pays the same as the other, no increase, and it is companionship and benefit for everyone, and there is no riba in it; because each person takes the same as his companion, whether by lot or otherwise. So this, if Allah wills, is the stronger position. Or rather, there is no harm, if Allah wills. Yes.
The questioner:
What did you tell them?
The Shaykh:
Yes, this is the basis of the prohibition, the reason for the prohibition is this, but the council saw that there is no harm because with equality there is nothing, so they agreed on this, an agreement of equality, there is no religious harm in it.
The questioner:
If a full lunar year passes over this amount, is zakah due on it?
The Shaykh:
If he has the money, he pays zakah on it, and if he spent it on his needs, he owes no zakah. Yes.
What is the ruling on a cooperative association among employees or teachers, where one person takes the money each month? Is this riba (usury or interest)? Because we heard in the year 1408 that Your Eminence said that this is forbidden and not permissible, and we heard in the year 1410 that Your Eminence said in the magazine al-Da'wah that this is permissible. So what is the correct position?
The Shaykh:
Associations that agree on a loan, where each person contributes one thousand or two thousand riyals, we used to dislike that, because it involves a loan contract with a loan, and we advised leaving it off as a precaution. Then it was discussed in the council of the senior scholars, and the majority of the council saw that there is no harm in it, if Allah wills; because there is no increase in it, rather each person pays the same as the other, no increase, and it is companionship and benefit for everyone, and there is no riba in it; because each person takes the same as his companion, whether by lot or otherwise. So this, if Allah wills, is the stronger position. Or rather, there is no harm, if Allah wills. Yes.
The questioner:
What did you tell them?
The Shaykh:
Yes, this is the basis of the prohibition, the reason for the prohibition is this, but the council saw that there is no harm because with equality there is nothing, so they agreed on this, an agreement of equality, there is no religious harm in it.
The questioner:
If a full lunar year passes over this amount, is zakah due on it?
The Shaykh:
If he has the money, he pays zakah on it, and if he spent it on his needs, he owes no zakah. Yes.
Source
فتاوى الحج - ١٨ — archive.org (8:30)
The Arabic text is a machine transcription of the audio recording.