What is the ruling on a savings circle among women, where they pool a sum of money and each month it goes to one of them?

The questioner : The second question, my sister? The second question. You are asking about the savings circle that is usually held among women, Honorable Shaykh?

The Shaykh : What is this savings circle? How does it work? You say a group of women, each month they pay one hundred, and this amount rotates among the group of women who are members of this savings circle? Well, there is nothing wrong with that; this is an act of good and kindness. Because perhaps one of the women needs more money than her salary, so if her sisters lend it to her, that is an act of good and kindness.

The questioner : Praise be to Allah. And this exists among women and men. For example, ten men, each one deducts a thousand from his salary and gives it to one person. In the second month, each one deducts a thousand from his salary and gives it to the second person, then the third, then the fourth, and so on. This is good and an act of charity.

The Shaykh : Is this considered relieving a Muslim of a hardship, meaning relieving the Muslims of a distress? Do these people borrow because of a distress that has befallen them? If so, it falls under the hadith: If it is not for a distress, it does not fall under the hadith.

The questioner : May Allah reward you. Is there anything else, my sister? Peace be upon you. And upon you be peace.

The Shaykh : Please, go ahead.