The JAK Members Bank, or JAK Medlemsbank is a cooperative, member-owned bank based in Skovde, Sweden. JAK is an acronym for Jord Arbete Kapital in Swedish 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 (effective interest rate on loans is about 2,5% on average).
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 keep
system 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.
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