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JAK Members Bank

The JAK Members Bank, or JAK Medlemsbank, is a cooperative, member-owned financial institution based in Skövde, Sweden. JAK is an acronym for Jord Arbete Kapital in Swedish or Land Labour Capital. A membership of approximately 38,000 (as of november 2011) dictates the bank’s policy and direction. The Board of Directors is elected annually by members, who are each allowed only one share of the bank. JAK Members Bank does not charge or pay interest on its loans, a principle it shares with Islamic banking. 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 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 must save after his loan was given, so they can continue earning saving points. This way, at the end of the 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.


JAK has been operating an interest-free savings and loan system since 1970. A bank license was obtained in 1997. Formally JAK is a co-operative bank with 30,000 members and a 12 percent annual grow rate.

Members’ deposits finance all loans. The members have saved a total sum of € 78 million and have borrowed € 69 million. Annual membership fees and loan fees (equals approximately 2.5 % effective rate of interest) cover administration and development costs.

In combination with the interest-free savings account JAK two products. Both are interest-free.

1. The (Original) Balanced Savings Loan
2. The (New) Support

The (Original) Balanced Savings Loan

This is the original loan that JAK has had since 1970. It is designed for people who are saving in order to get a loan for themselves or for a relative or a friend. All loans have to be balanced by savings. A certain amount of saving points that are borrowed have to be balanced out by an equal amount of saving points that are saved. The saving can be done before the loan is taken and during repayment but the bank and the saver/borrower will enter an agreement that the balance will be reached three months after the payment of the last installment. Then the money that is saved during the loan period can be withdrawn.

For example: For a loan of SEK 100,000 for 10 years the payments per month amount to SEK 1,775.00 (repayment 833.00, loan fee 108.00 and savings deposit 833.00). If the borrower had saved SEK 1,500 for 48 months before the loan, then the payments per month would have been SEK 1,532 (repayment 833.00, loan fee 108.00 and savings deposit 590.00). When the loan is repaid the borrower can withdraw SEK 100,000.00 in the first case and SEK 70,843.00 in the second case.

The (New) Support Savings & Loan Tool

This is a new instrument that JAK introduced in 2001. It is designed for small companies and associations who can afford to pay the fee and the installments but nothing more. These loans have to be balanced by savings just as the ordinary savings loan. The problem is solved because someone else is doing the saving.