Sheikh Muhammad Rashid was a son of Sheikh Bilal Kabir Muhammad, a prominent Sheikh from the Qallu clan of the Ittu Oromo. He was born in 1906 at a rural village called Belbeleti-Chirratti, 15 km south of Gelemso town. His mother, known as Fatima Abdullahi Hammado, had died immediately after she gave birth to Sheikh Muhammad Rashid so that his father married another wife and had a daughter called Khalisa Sheikh Bilal who would become the Sheikh's only sister.