What is your opinion on some employees collecting a monthly sum of money and giving it to one of them, and so on until everyone has received it?
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The questioner : He says: We gather, a number of individuals.
The Shaykh : What?
The questioner : We gather, a number of individuals, and we collect a sum of money from each individual, which is called a mutual fund, and one person takes it each month. Is this permissible or not, and what is the evidence for that? Knowing that I have heard some students of knowledge quote from some scholars that he said regarding it, and what appears to me is that it is forbidden. And I did not understand why it is forbidden.
The Shaykh : Yes. The form of the issue is that a number of employees gather in a department and deduct one thousand riyals, for example, from each man's salary and give it to one of them. In the second month, they deduct one thousand riyals from each person and make it for another man, and in the third month likewise, and the fourth, and so on. We say: This is permissible and there is no harm in it. The person who says that transactions are permissible is not required to provide the evidence that is required of the one who says that it is not permissible. Who is the one who is required to provide evidence? The one who says that it is not permissible, because the original ruling for customs and transactions is that they are lawful.
So if someone says: This action is forbidden, and another says: This action is lawful, then who is right? The one who said it is lawful, until the one who said it is forbidden establishes evidence for the prohibition. There is nothing in this issue that necessitates prohibition, because the most that is in it is that a man lent to another a loan on the condition that he repay it only, because when they give to one of them, it is on the basis that their share of this loan will come to them. Their share of this loan does not benefit them, because they will repay this loan in any case, so it is as if they said: We lend to you on the condition that you repay us. As for the loan that brings benefit, it is the one where he gives him one hundred and takes one hundred and ten, for example, or gives him one hundred and benefits from his car, or gives him one hundred and benefits from his house. This is the loan that brings benefit. But if he gives him one hundred and takes only one hundred, then this is not a loan that brings benefit. So it is a valid transaction and there is no harm in it at all. Yes.
The Shaykh : What?
The questioner : We gather, a number of individuals, and we collect a sum of money from each individual, which is called a mutual fund, and one person takes it each month. Is this permissible or not, and what is the evidence for that? Knowing that I have heard some students of knowledge quote from some scholars that he said regarding it, and what appears to me is that it is forbidden. And I did not understand why it is forbidden.
The Shaykh : Yes. The form of the issue is that a number of employees gather in a department and deduct one thousand riyals, for example, from each man's salary and give it to one of them. In the second month, they deduct one thousand riyals from each person and make it for another man, and in the third month likewise, and the fourth, and so on. We say: This is permissible and there is no harm in it. The person who says that transactions are permissible is not required to provide the evidence that is required of the one who says that it is not permissible. Who is the one who is required to provide evidence? The one who says that it is not permissible, because the original ruling for customs and transactions is that they are lawful.
So if someone says: This action is forbidden, and another says: This action is lawful, then who is right? The one who said it is lawful, until the one who said it is forbidden establishes evidence for the prohibition. There is nothing in this issue that necessitates prohibition, because the most that is in it is that a man lent to another a loan on the condition that he repay it only, because when they give to one of them, it is on the basis that their share of this loan will come to them. Their share of this loan does not benefit them, because they will repay this loan in any case, so it is as if they said: We lend to you on the condition that you repay us. As for the loan that brings benefit, it is the one where he gives him one hundred and takes one hundred and ten, for example, or gives him one hundred and benefits from his car, or gives him one hundred and benefits from his house. This is the loan that brings benefit. But if he gives him one hundred and takes only one hundred, then this is not a loan that brings benefit. So it is a valid transaction and there is no harm in it at all. Yes.