Investing in a fellowship fund

Egypt's Dar Al-Ifta

Investing in a fellowship fund


no. 1508 for the year 2004 which includes the following:
I work for Egypt Air. I participated in the company's workers' Insurance Fund for which a monthly sum is deducted from my salary. I am concerned about the legitimacy of the fund's investments in the following manner:

  1. Purchasing government or government guaranteed securities.
  2.  Investing in stocks and shares.
  3.  Owning inland property.
  4.  Giving interest based loans to members.
  5.  Depositing foreign and domestic currencies in Egyptian banks.
  6.  Holding a current account in one of the Egyptian banks.

I would like to know the extent of the legitimacy of continuing to participate in the insurance fund and whether the above mentioned investments are Shari'ah compliant.


There is no objection in Islamic law to participating in the insurance fund on the basis that it is a kind of social solidarity between all of the participants. Likewise, there is no objection to investing the fund's money as mentioned above with exception to the interest bearing bonds and granting interest based loans because they are considered usury which is unlawful in Islamic law.

Securities are considered [financial] vehicles indicating a creditor's relationship with a bank or corporation. The holder of these securities owns a deferred interest based debt which is classified under prohibited usury which is prohibited. The same applies to granting interest based loans to participants, the prohibition of which is based on the the legal axiom "Every interest based loan is considered usury".

Therefore, we call upon those in charge of the fund to take the above into consideration for the sake of preserving this service in compliance with Islamic law.

The above answers the question and Allah the Almighty knows best. 


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