To what extent are financial societies legitimate, and is Zakat obligatory upon them, and how should it be distributed among the recipients of the first installments?

The aforementioned practice of collecting money monthly and paying it to one person in rotation is permissible, as it involves benefit and cooperation. Evidence for its permissibility is found in what the two Sheikhs narrated from Abu Musa, that the Prophet, peace and blessings be upon him, said: "Indeed, when the Ash'aris ran short of provisions during campaigns or their families' food became scarce in Medina, they would gather whatever they had in one garment, then divide it among themselves equally in one vessel. They are from me, and I am from them." Ibn Baz and Ibn Uthaymeen issued fatwas permitting it.

As for zakat: The one who receives the money is not obligated to pay zakat on it, even if it reaches the nisab and remains with him for a year, if he has a debt that consumes the nisab. As for the one who pays the money, he is considered a creditor, and zakat is obligatory on his paid money if the debt is owed by a recognized, solvent person, whether it has been collected or not. However, if the debt is owed by an insolvent person or one who procrastinates, zakat is not obligatory until it is collected.