The JAK Members Bank
, or JAK Medlemsbank
, is a cooperative, member-owned bank based in Skovde, Sweden
is an acronym for Jord Arbete Kapital
or Land Labour Capital.
A membership of approximately 35,000 (as of 2008) dictates the bank's policy and direction. Board of Directors is voted annually by members, who are allowed only to have one share of the bank. Similar to Islamic banking
, the JAK Members Bank does not charge or pay interest on its loans (see Usury).
All of the bank's activities occur outside of the capital market
as its loans are financed solely by member savings. As of 2008 members saved 97 million Euros, of which 86 million are given as loans to members. Administrative and developmental costs are paid for by membership and loan fees.
JAK banking is made possible by saving points system: members accumulate saving points during saving periods, they use saving points asking for a loan. The main idea is that one is allowed to take a loan for himself in the same measure he allows other people to have loans, saving into his account. For this reason - asking for a loan - earned saving points must be equal to spent saving points, in order to ensure sustainability. If a member is borrowing more saving points than he has, he is obliged to continue accumulating so-called "aftersavings" during repayment period. "Aftersavings" are a fixed quota of money that one has to save after his loan was given, in order to continue earning saving points. By this way, at the end of his repayment period, earned saving points will be equal to spent saving points, and at that time he will be able to have back all his aftersavings.
The co-operative society Jord Arbejde Kapital
was founded in Denmark during the Great Depression
in 1931. The society issued a popular local currency
which was subsequently outlawed by the Danish government in 1933. In 1934 it founded an interest-free savings and loan system and a Local Exchange Trading System
. Though both systems were forced to close, the savings and loan system reemerged in 1944. The experiments with JAK banking in Denmark inspired a group in Sweden to develop a non-profit named Jord Arbete Kapital - Riksförening för Ekonomisk Frigörelse
(National Association for Economic Emancipation) in 1965. This pioneers' group developed the mathematical system based on saving points, called "balanced saving system". The association grew slowly at first and only received a banking license from the Swedish Financial Supervisory Authority
at the end of 1997.
According to the JAK philosophy, economic instability is a result of the taking of interest
JAK operates under the following premises:
- The taking of interest is inimical to a stable economy
- Interest causes unemployment, inflation, and environmental destruction
- Interest moves money from the poor to the rich
- Interest favours projects which tend to yield high profits in the short-term
The ultimate goal of JAK is to abolish interest as an economic instrument and to replace it with
instruments that are in the best interest of people. First aim of the bank is to offer a feasible financial instrument to its members, sustainable for the environment and serving local economy.
Marketing for JAK is done primarily by volunteers and Word of mouth
advertising. Nearly 550 members organized in 28 local branches make voluntary work spreading JAK idea and searching for new members. Deposits are accepted and loans are given in Swedish Krona (SEK
). Mortgages or personal guarantees may only be given if the property or the guarantor is Swedish. It's compulsory to be resident in Sweden in order to be allowed to ask for a loan with JAK. The savings of members are covered under the deposit guarantees of the Swedish banking system.