What is the ruling on establishing a fund for mutual assistance among relatives and neighbors?

The questioner : Honorable Shaykh, a woman asks that the neighbors form a cooperative among themselves, and each person or each family takes the amount they need. What is the ruling of the Shari'ah in your view regarding this?

The Shaykh : I mean they have gathered a fund.

The questioner : A cooperative, yes, among the neighbors.

The Shaykh : Among the neighbors, for cooperation.

The questioner : For cooperation, yes.

The Shaykh : There is nothing wrong with it, because this falls under the category of cooperation. However, I prefer that they do not establish a fund for this purpose, because this may lead some of them to be negligent in the event of accidents, since he knows that the cost of the accident will be covered by the fund, so he does not take precautions. But if an accident occurs, they gather money for it. This is better so that people do not become negligent regarding accidents.

The presenter : May Allah reward you, Honorable Shaykh, and may Allah bless you and your knowledge, and benefit the Muslims through you, and may Allah reward you with the best reward for us and for the Muslims.