JAK members bank
From Wikipedia, the free encyclopedia
The JAK Members Bank, or JAK Medlemsbank is a cooperative, member-owned bank based in Skovde, Sweden. JAK is an acronym standing for Jord Arbete Kapital in Swedish or Land Labour Capital. A membership of approximately 30,000 (as of 2007) dictates the bank's policy and direction. The JAK Members Bank shares a similarity with Islamic banking in that it 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. Administrative and developmental costs are paid for by membership and loan fees.
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[edit] History
The co-operative society Jord Arbejde Kapital (Land Labour Capital) 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. The association grew slowly at first and only received a banking license from the Swedish Financial Supervisory Authority at the end of 1997.
[edit] Philosophy
According to the JAK philosophy, economic instability is a result of the taking of interest.
JAK operates under the following principles:
- 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 its members.
[edit] Membership
Marketing for JAK is done primarily by volunteers and Word of mouth advertising. Deposits are accepted and loans are given in Swedish Crowns (SEK). Mortgages or personal guarantees may only be given if the property or the guarantor is Swedish. While JAK banking does not pay interest on savings, it does provide a means of earning savings points which resemble interest income. The member's loan entitlement is calculated based upon their savings points. The savings of members are covered under the deposit guarantees of the Swedish banking system.
