Daret: how Algeria's rotating savings circle works

What is a daret, or rotating savings circle?

The daret (الدارت, also called a tontine in French, a qur'a or a jam'iyya) is a rotating savings circle that many Algerian families, office colleagues and neighbours run among themselves. Economists call it a rotating savings and credit association, or ROSCA. Members all pay in regularly and take turns drawing the money that has built up.

It is not only found in Algeria. The same system turns up in Asia, West Africa, Latin America and among migrant communities in Europe, under dozens of names. It lasts for a simple reason: it gets you a lump sum without a bank, without interest, and with friendly pressure that keeps you paying each month.

People in Algeria often use the pot for big expenses that come round at fixed times: the rentrée (back-to-school), the sheep for Aïd el-Kebir, a wedding, a fridge, a rental deposit, or summer at the sea. The pot is the same for everyone. Only the date you receive it changes.

How a daret works: a worked example in dinars

Imagine 10 colleagues who each pay 10 000 DA on the 5th of every month, a few days after payday. Each month the organiser collects 100 000 DA and gives it to one member. After 10 months everyone has paid 100 000 DA and received 100 000 DA.

The table shows what is really going on. Whoever takes the pot first gets an interest-free loan of 90 000 DA. Whoever takes it last has saved, and has given everyone else credit along the way. When prices are rising, the last 100 000 DA buys a little less than the first. That is the hidden cost of a late turn, and it is worth knowing about when you choose your place (see why your basket feels more expensive ).

How to run a daret fairly among family or colleagues

Most daret problems come from rules that nobody ever said out loud. Ten minutes of agreement before the first payment saves months of awkward conversations.

1. Choose the members carefully. Pick people with a steady income and a reputation for paying back. Eight to twelve members is a manageable size, and a 10-month cycle fits nicely between two Aïds.
2. Set an amount everyone can manage in a bad month, not just a good one. If your salary is 60 000 DA, a 10 000 DA contribution is a sixth of it: put it in your monthly budget as a fixed expense, like rent.
3. Fix a payment date shortly after payday (the 3rd or 5th of the month) and one way of paying: cash in hand, or a transfer the members agree on.
4. Decide the order. A draw (the qur'a) is the simplest fair method and avoids arguments. Members can then swap turns by mutual consent, for example to let someone with a wedding or the rentrée go first.
5. Name an organiser and write down a list: members, phone numbers, amount, order, and a column ticked for each payment. Share a copy or a photo with everyone every month.
6. Agree in advance what happens if someone pays late, falls ill or wants to leave. A common rule is that a member who has already taken the pot keeps paying until the end. A member who has not yet been paid can be replaced, or gets their money back on the date of their turn.
7. Keep it clean: nobody gets back more than they put in, and nobody is asked for a gift, a meal or a late-payment fine in exchange for their turn. That matters for the religious question too (see below).

Risks of a rotating savings circle, and how to limit them

A daret has no insurance and no guarantee except the members' word. These are the risks to talk through before you join.

• Default: an early taker stops paying. You can limit this by giving the first turns to the people the group knows best, or to the organiser, who has the most to lose.
• Money held too long: the organiser should pass the pot on the same day it is collected, and should not use it in the meantime.
• Your own emergency: if you lose income halfway through, you still owe your share. Keep a small emergency cushion outside the daret.
• Inflation for late takers: the last pot buys a little less. Some people take a late turn on purpose to force themselves to save, and accept that cost.
• Arguments: unwritten rules and memories that don't match. The monthly list, with a tick for each payment, settles most of them.
• Joining too many circles: two darets at 10 000 DA each are 20 000 DA a month that you can't touch. Add them up before you say yes.

Is the daret halal or haram? What scholars and the ministry say

Jibi doesn't give religious rulings. Here is what fatwa bodies have published. Jordan's General Iftaa' Department answered two questions in 2012 about a 10-member circle exactly like the one in our table. It ruled that the practice is permissible. It does not count as a loan that brings the lender a benefit, because nobody gets back more than they paid in. In a second fatwa it added that the daret is not "lend me and I will lend you" (asallifni usallifuk, a loan made on condition of getting a loan back), because members set no explicit condition of that kind among themselves.

Many well-known contemporary scholars, including Sheikh Ibn Baz and Sheikh Ibn Uthaymin, also allowed it , while others, such as Sheikh Salih al-Fawzan, forbade it. The Maliki school, which most Algerians follow, needs a separate mention. Libya's Dar al-Ifta, which follows the Maliki school, notes in fatwa no. 5429 that the relied-upon Maliki view forbids it, because a loan must benefit only the borrower. It still allows the daret by following the Shafi'i scholars, because people need it and it keeps them away from interest-bearing loans.

In Algeria, the Ministry of Religious Affairs and Waqfs takes individual questions through its online fatwa service , with answers given by Algerian scholars. That is where to send your question if you want a ruling that follows the national religious reference. If you also wonder whether money waiting in your circle counts towards zakat, see our guide to zakat on savings .

Keeping track of your daret in Jibi

A daret is really a debt, so it is easiest to follow as one. In Jibi, the free budgeting app made for Algeria, add a recurring entry for your monthly contribution (10 000 DA on the 5th, for example) so it shows up in your budget every month, next to rent and the Sonelgaz bill.

If you take the pot early, record it under debts: you owe the circle 90 000 DA, and each monthly payment brings that balance down. If your turn comes late, record it the other way round, as money owed to you, and watch it grow until your month arrives. The debts and installments guide shows how.

Jibi never connects to a bank, to Algérie Poste or BaridiMob, and never asks for card details: you note what you pay, in cash or from your Edahabia or CIB wallet. It is free, in Arabic, French and English, on the web, on iPhone and on Android.