The Ruling on the Employee Savings Association
Machine translationRead the Arabic original
Question:
Umm Khalid al-Farih says: Shaykh, regarding the association that several people or teachers agree to, where each person pays a specific amount and each person receives [the amount] at the end of the month, and so this association continues until all those who participate in it have finished. I would like to inquire from Shaykh Salih about the ruling on this practice.
Answer:
This is called a collective loan or an employee association. This is an old practice that has existed for years. It was presented to the Committee of Senior Scholars a long time ago, and the majority of them permitted it. However, I have reservations about it, because it is a loan that yields benefit; that is, he lends to them on the condition that they lend to him. It also falls under two sales in one transaction, and a loan that yields benefit. So I have had reservations about it since that time. Yes.
Umm Khalid al-Farih says: Shaykh, regarding the association that several people or teachers agree to, where each person pays a specific amount and each person receives [the amount] at the end of the month, and so this association continues until all those who participate in it have finished. I would like to inquire from Shaykh Salih about the ruling on this practice.
Answer:
This is called a collective loan or an employee association. This is an old practice that has existed for years. It was presented to the Committee of Senior Scholars a long time ago, and the majority of them permitted it. However, I have reservations about it, because it is a loan that yields benefit; that is, he lends to them on the condition that they lend to him. It also falls under two sales in one transaction, and a loan that yields benefit. So I have had reservations about it since that time. Yes.
Source
قناة «مؤسسة الدعوة الخيرية»، فتاوى على الهواء 03-01-1435هـ - الفوزان — youtube.com (16:10)
The Arabic text is a machine transcription of the audio recording.