Stockvel / ROSCA / Chitfund

Stockvel / ROSCA / Chitfund


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


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

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

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'ala Knows Best

Mawlana Ismail Desai
Student, Darul Ifta
Durban, South Africa

Checked & Approved:
Mufti Ebrahim Desai

Disclaimer The views and opinions expressed in this answer belong only to the author and do not in any way represent or reflect the views of any organizations to which he may be affiliated with. The opinions and educational information proffered in this communication are based on the jurisprudential understanding and available knowledge of the author. Given that contemporary issues and interpretations of contemporary issues are subjective in nature, another scholar may reach different juristic inferences and conclusions to those as expressed by the author. Whilst every effort has been taken to ensure total academic integrity and honesty, the author is open to corrective measures based on sound academics and juristic inferences. The Shari’ah ruling given herein is based specifically on the specific scenario in question. The author bears no responsibility towards any party that acts or does not act on this answer and is exempted from any and all forms of loss or damage. This answer may not be used as evidence in any court of law without prior written consent from the author. Any or all links provided in our emails, answers and articles are restricted to the specific material being cited. Such referencing should not be taken as an endorsement of other contents of that website.

Browse   next Fataawa

Legacy of Mufti Ebrahim Desai in Islamic Commerce and Finance

Listen to Audio podcast of a Radio Islam programme