Debt and Loan: Merit of Cooperative Societies Offering Ribā-Free Loans and Strengthening Kinship Ties
Practical Laws of Islam as per the teachings of Imam Khamenei
Debt and Loan: Merit of Cooperative Societies Offering Ribā-Free Loans and Strengthening Kinship Ties
English:
Question #1766:
A cooperative society is set up with joint capital from its members. The society provides ribā-free loans to its members. The objective of the society is to help the individuals. What is the view on the work carried out by its members in order to help and to maintain ties of kinship among the blood relatives?
Answer #1766:
There is no doubt that it is both permissible and commendable to work jointly towards providing loans for the believers along the lines described in the question. However, if the money was provided by the member as a share in the capital of the company on the condition of giving the member a loan in the future, this is not permissible, even though the loan deed is correct in principle [so that the borrower owns the money and owes it is to the lender].
-Imam Khamenei, Practical Laws of Islam, Importance and Conditions of Debt and Loan