A group of young men established a savings association in which each member receives the contributions of all the others in a given month or part of a month, and then the second member receives them in the second month. What is the ruling on this association?
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The questioner : May Allah reward the honorableThe Shaykh : I am asking about a group of young men who established a savings association. The meaning of this association is that one member of the group receives the contributions of all the others in a given month or part of a month, and then another person receives them in the second month. What is the ruling on this association? And if the number of members in this association is more than thirteen men, and one of the individuals reaches the end of a lunar year on his share without having received it, is zakah due on this share for which the year has passed, or not?
The Shaykh : There is nothing wrong with this association; it is permissible and there is absolutely no issue with it. That is, a group of employees gather and say, “We will give one of us [a share]; each of us will give one thousand riyals.” If there are ten of them, how much will the first one receive? Nine thousand. In the second month, the second one receives nine thousand, and so on until it goes around to all of them. There is absolutely nothing wrong with this. And if some people suspect that this falls under the category of a loan that yields benefit, that is a misconception on their part. Where is the benefit that it yields? I lent this man one thousand, and how much did I receive? One thousand. No benefit came. They say that he knows that he will be repaid and that he will receive ten thousand. We say, yes, he knows that those who borrowed from him will repay him. Is a person who lends to someone on the condition that he be repaid considered to have made a loan that yields benefit? Absolutely not. In any case, there is nothing wrong with it. As for the second part of the question: Is zakah obligatory on the debts owed by your brothers whom you lent to? The answer is yes, because they are wealthy, and zakah is obligatory on debts owed by the wealthy. However, you have a choice: if you wish, you may delay its zakah until it is combined with your wealth, or if you wish, you may delay its zakah until you receive it, and then you may pay it out for the past period.
The Shaykh : There is nothing wrong with this association; it is permissible and there is absolutely no issue with it. That is, a group of employees gather and say, “We will give one of us [a share]; each of us will give one thousand riyals.” If there are ten of them, how much will the first one receive? Nine thousand. In the second month, the second one receives nine thousand, and so on until it goes around to all of them. There is absolutely nothing wrong with this. And if some people suspect that this falls under the category of a loan that yields benefit, that is a misconception on their part. Where is the benefit that it yields? I lent this man one thousand, and how much did I receive? One thousand. No benefit came. They say that he knows that he will be repaid and that he will receive ten thousand. We say, yes, he knows that those who borrowed from him will repay him. Is a person who lends to someone on the condition that he be repaid considered to have made a loan that yields benefit? Absolutely not. In any case, there is nothing wrong with it. As for the second part of the question: Is zakah obligatory on the debts owed by your brothers whom you lent to? The answer is yes, because they are wealthy, and zakah is obligatory on debts owed by the wealthy. However, you have a choice: if you wish, you may delay its zakah until it is combined with your wealth, or if you wish, you may delay its zakah until you receive it, and then you may pay it out for the past period.