And there is a condition, which is the condition of lending; they require the person to lend in order to borrow. Is there anything wrong with this condition?
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The questioner : Shaykh, may Allah reward you. These small associations that teachers run in their schools or employees in their departments, we see them, and they are known to everyone, of course.
The Shaykh : Do not define them. Perhaps I know them, and perhaps others do not know them.
The questioner : Yes, the employees participate in them, and let us assume their number is twenty people, and each of them pays two thousand riyals every month, and they take turns receiving them.
The Shaykh : To whom do they pay them?
The questioner : They pay them to one of them, and so on, taking turns.The Shaykh : So when they pay him two thousand, he has twenty thousand: two thousand from his side and eighteen thousand from the others.
The questioner : And they take turns receiving them, but we see that in this association there is a condition, which is the condition of lending; they require the person to lend in order to borrow. Is there anything wrong with this condition?
The Shaykh : No, there is nothing wrong with it, and it is fulfilling the covenant. For example, if they collect eighteen thousand and give it to a man, they must fulfill their obligation.
The questioner : If one of them, for example, said: I do not have it, but I want you to lend to me, they did not lend to him.
The Shaykh : Yes, it is known, because it is a joint association.
The questioner : But does it not bring a benefit in this, that you lend and you borrow?
The Shaykh : No, no, absolutely not, because this benefit is for everyone. The prohibited benefit is when the one who benefits is the lender alone. But if it is from both sides, there is no harm. And from that, meaning from what brings benefit to both sides: if a man has land, his own land, and a farmer comes to him and says: I want to farm it on the condition that you lend to me to buy seeds and pay the workers and the like, and he says: Yes, there is no harm in this. Because here, the farmer benefited and the landowner benefited, and there is no harm in this. The prohibited thing is for the benefit to be for the lender alone, because in that case, he is the one who takes riba. If he lends, for example, ten thousand and imposes another condition from which he benefits, it becomes as if he lent ten thousand and took ten thousand and more, and then it becomes riba. But if it is for the benefit of both parties, there is no harm in that. And Ibn al-Qayyim (may Allah have mercy on him) mentioned this, meaning: that if it is a loan for the benefit of both parties, he mentioned this in his book Tadhhib al-Sunan, Tadhhib Sunan Abi Dawud.
The Shaykh : Do not define them. Perhaps I know them, and perhaps others do not know them.
The questioner : Yes, the employees participate in them, and let us assume their number is twenty people, and each of them pays two thousand riyals every month, and they take turns receiving them.
The Shaykh : To whom do they pay them?
The questioner : They pay them to one of them, and so on, taking turns.The Shaykh : So when they pay him two thousand, he has twenty thousand: two thousand from his side and eighteen thousand from the others.
The questioner : And they take turns receiving them, but we see that in this association there is a condition, which is the condition of lending; they require the person to lend in order to borrow. Is there anything wrong with this condition?
The Shaykh : No, there is nothing wrong with it, and it is fulfilling the covenant. For example, if they collect eighteen thousand and give it to a man, they must fulfill their obligation.
The questioner : If one of them, for example, said: I do not have it, but I want you to lend to me, they did not lend to him.
The Shaykh : Yes, it is known, because it is a joint association.
The questioner : But does it not bring a benefit in this, that you lend and you borrow?
The Shaykh : No, no, absolutely not, because this benefit is for everyone. The prohibited benefit is when the one who benefits is the lender alone. But if it is from both sides, there is no harm. And from that, meaning from what brings benefit to both sides: if a man has land, his own land, and a farmer comes to him and says: I want to farm it on the condition that you lend to me to buy seeds and pay the workers and the like, and he says: Yes, there is no harm in this. Because here, the farmer benefited and the landowner benefited, and there is no harm in this. The prohibited thing is for the benefit to be for the lender alone, because in that case, he is the one who takes riba. If he lends, for example, ten thousand and imposes another condition from which he benefits, it becomes as if he lent ten thousand and took ten thousand and more, and then it becomes riba. But if it is for the benefit of both parties, there is no harm in that. And Ibn al-Qayyim (may Allah have mercy on him) mentioned this, meaning: that if it is a loan for the benefit of both parties, he mentioned this in his book Tadhhib al-Sunan, Tadhhib Sunan Abi Dawud.