We are a group of colleagues who want to form a cooperative, where each of us pays a specific amount, such as four thousand.
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The questioner : There are more than one question regarding the topic of the cooperative. One of them says: O honorable Shaykh, we are a group of colleagues who want to form a cooperative, where each of us pays a specific amount, such as four thousand. One of us takes the amount, and we proceed in order to take the amount. The reason for the question is that we heard it is forbidden or contains a doubt. So what is your ruling, O honorable Shaykh, in this matter?
The Shaykh : My ruling in this matter is that it is permissible, and there is absolutely no doubt in it. Rather, it is a form of cooperation among Muslims. For example, if there are ten of them and they say: one thousand is taken from each person per month, and the first one is given it. In the second month, the second one is given it, and in the third month, the third one is given it, and so on until it returns to the first one again. What harm is there in this? What usury or interest is there in this? It is good and cooperation. Sometimes a person is in distress and his salary in hand is not sufficient, so he seeks help from his brothers and says: lend to me. If someone were to say: if he lends to them, they will lend to him.
We say: Yes, and did he take an increase? He did not take an increase. He gave a thousand and took how much? A thousand. It did not increase, and there is no problem in it. Ruling that it is forbidden is an error in reality. Every loan that brings a benefit is usury or interest. This is if the benefit is an increase or a benefit where one says: I lend you ten thousand and let you live in your house for a year, for example. But in this case, the lender did not receive an increase over what he lent, and he benefited, and his brothers also benefited. So in my view, there is no problem in it, and it is a matter of cooperation among brothers. Yes.
The questioner : If they are more than twelve?
The Shaykh : What? Huh?
The questioner : If they are more than twelve, is there zakah on it?
The Shaykh : What is in it?
The questioner : Is there zakah on it?
The Shaykh : Yes, the issue of zakah is according to the opinions of the scholars regarding the issue of debt. Now, for example, if the first one gives a thousand, and the second one gives a thousand, and the third one gives a thousand, he will have, at the end of the year, he will have in the liability of these people, if they are nine, how much will be in their liability? Nine thousand. It is subject to zakah, because zakah is obligatory on a debt that is due to be paid. Yes.
The Shaykh : My ruling in this matter is that it is permissible, and there is absolutely no doubt in it. Rather, it is a form of cooperation among Muslims. For example, if there are ten of them and they say: one thousand is taken from each person per month, and the first one is given it. In the second month, the second one is given it, and in the third month, the third one is given it, and so on until it returns to the first one again. What harm is there in this? What usury or interest is there in this? It is good and cooperation. Sometimes a person is in distress and his salary in hand is not sufficient, so he seeks help from his brothers and says: lend to me. If someone were to say: if he lends to them, they will lend to him.
We say: Yes, and did he take an increase? He did not take an increase. He gave a thousand and took how much? A thousand. It did not increase, and there is no problem in it. Ruling that it is forbidden is an error in reality. Every loan that brings a benefit is usury or interest. This is if the benefit is an increase or a benefit where one says: I lend you ten thousand and let you live in your house for a year, for example. But in this case, the lender did not receive an increase over what he lent, and he benefited, and his brothers also benefited. So in my view, there is no problem in it, and it is a matter of cooperation among brothers. Yes.
The questioner : If they are more than twelve?
The Shaykh : What? Huh?
The questioner : If they are more than twelve, is there zakah on it?
The Shaykh : What is in it?
The questioner : Is there zakah on it?
The Shaykh : Yes, the issue of zakah is according to the opinions of the scholars regarding the issue of debt. Now, for example, if the first one gives a thousand, and the second one gives a thousand, and the third one gives a thousand, he will have, at the end of the year, he will have in the liability of these people, if they are nine, how much will be in their liability? Nine thousand. It is subject to zakah, because zakah is obligatory on a debt that is due to be paid. Yes.