Category: Financial Transactions
Fatwa#: 36519
Asked Country: Italy

Answered Date: Aug 09,2016

Title: Stockvel/ROSCA/Chitfund

Question

Still waiting for a reply on below question:

BC Rules- one of the form of BC

We are having a common practice of BC wherein few people join and set up a figure to be paid each month.In one of it forms they put an option for the partners to offer lowest amount and same amount will be given to the person. Each person will contribute accordingly. E.g.- Total- 20 persons Instalment- 5000 each Each person in one month should get 100,000 In this case, no one is assigned a month. Each month these persons can negotiate with the payment amount like 90000, 80000 etc. based on the lowest offer this amount will be given to the person. So each perosn will contribute based on the final figure instead of paying 5000 which was the original amount. Benfits: This helps the needy person not avoid a loan or interest based money theereby completing his task. No one pays extra amount and even the organizer pays the same amount. Is this tyoe of BC is jaiz or it is prohibted in Islam

Answer

Answer:

In the Name of Allah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuhu

We are unsure of the term ‘BC” you refer to. Nevertheless we assume you are referring to Stockvel/ROSCA/Chit Funds and the like.

 

Your question refers. The procedure you refer to is not clear, however we understand that several defined individuals pool their funds together say $1000. The partners bid for a loan and the lowest bid is paid out with the remainder returned to the partners. The partners agree on payment terms on an interest free basis. Kindly confirm if our understanding is correct or not.

 

And Allah Ta’āla Knows Best

Ismail Desai,

Darul Iftaa

 

Mufti Ebrahim Desai

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