What is the ruling on establishing a family cooperative fund based on an initial payment of 500 Saudi riyals annually for its foundation, and a monthly subscription of 100 Saudi riyals, aiming to provide interest-free benevolent loans to members two years after its establishment, in fulfillment of Allah's saying: "And cooperate in righteousness and piety, but do not cooperate in sin and aggression"? And is Zakat obligatory on this fund?
The establishment of the aforementioned fund is permissible because it is a loan in which no additional benefit is stipulated for anyone. The Council of the Board of Senior Scholars has approved it due to the benefit it entails. Zakat is obligatory on the funds deposited therein as long as they remain in the ownership of their contributors, and each person must pay Zakat on their share if it reaches the nisab (minimum taxable amount).
Summarized from the full answer at Ftawy · reviewed Sep 2, 2026
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