The Ruling on What Is Called the Cooperative Association Among Employees

Question: A group of teachers collects a sum of money from their salaries at the end of each month and gives it to a specific person among them. At the end of the second month, it is given to another person, and so on until everyone receives their share. Some people call it “the association.” What is the ruling of the Shari'ah regarding this?

Answer: There is nothing wrong with this. It is a loan that does not stipulate any extra benefit for anyone. The Council of Senior Scholars has looked into this matter and decided, by majority, that it is permissible because of the benefit it offers to everyone without any harm. And success is from Allah.