What is the ruling on what is called a money association, where each person pays a monthly amount, then they draw lots and each takes their turn? Also, is zakah due on this money for the one who receives it after a year?
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The questioner : May peace be upon you, esteemed Shaykh: As for me, I am part of a group in a money association. We are approximately thirty people in a thirty-person association, and each person pays one thousand riyals monthly.
The Shaykh : For each person?
The questioner : Yes, then they draw lots, meaning each person is assigned, for example, the first month, the second month, and the third month. My turn in this association is in the coming Ramadan; we started five months ago, my share is twenty-one thousand, and I have a debt of twenty thousand in it. So the question is, what is your opinion of this association? Is there zakah for the one who takes the thirteenth turn, meaning after a year? And is there zakah on this amount for me?
The Shaykh : As for the association, it is permissible. There is nothing wrong with this association because it is a matter of cooperation and kindness to the brothers. It is a pure loan and does not involve taking a benefit, as some people imagine. Therefore, I pay one thousand riyals and only one thousand riyals come to me; I do not benefit. The benefit that returned to me, I did the same for, because I lent and I lent.
As for zakah, it is obligatory for a person to pay zakah on what he has of debts, even if he is in debt. So if, for example, the time for your zakah comes, whether in Ramadan or otherwise, you count what you have of debts with people and pay zakah on it. But if you wish, you may pay it out with your wealth, or if you wish, you may record it, and when you receive the debt, you pay your zakah. Yes, that is correct.
The Shaykh : For each person?
The questioner : Yes, then they draw lots, meaning each person is assigned, for example, the first month, the second month, and the third month. My turn in this association is in the coming Ramadan; we started five months ago, my share is twenty-one thousand, and I have a debt of twenty thousand in it. So the question is, what is your opinion of this association? Is there zakah for the one who takes the thirteenth turn, meaning after a year? And is there zakah on this amount for me?
The Shaykh : As for the association, it is permissible. There is nothing wrong with this association because it is a matter of cooperation and kindness to the brothers. It is a pure loan and does not involve taking a benefit, as some people imagine. Therefore, I pay one thousand riyals and only one thousand riyals come to me; I do not benefit. The benefit that returned to me, I did the same for, because I lent and I lent.
As for zakah, it is obligatory for a person to pay zakah on what he has of debts, even if he is in debt. So if, for example, the time for your zakah comes, whether in Ramadan or otherwise, you count what you have of debts with people and pay zakah on it. But if you wish, you may pay it out with your wealth, or if you wish, you may record it, and when you receive the debt, you pay your zakah. Yes, that is correct.