JAK Members Bank
The JAK member bank (Swedish: JAK Medlemsbank ) is the first bank in Sweden, which realizes an interest-free banking system for their members.
The acronym JAK stands for the Swedish words Jord, Arbete and capital to German land, labor, capital. The bank was founded in 1965 as a cooperative savings and loan association and in December 1997 received the official status of a bank.
By his own admission, the main task of the cooperative is to provide members of interest-free loans savings. In 2007, the cooperative had 33,000 members ( 2005 = 28,000 ) to the 550 local agents and 28 offices throughout Sweden cared. The bank deposits in 2007 amounted to approximately 87 million euros; the loans issued approximately 76 million euros. His seat, the Institute in Skövde.
Operation
The JAK Bank works like a building society, in which the money of the members merged with each other and bestowed. However, no debit or credit interest will be paid.
A numerical example will illustrate clearly how the interest-free savings loans differs from a traditional mortgage financing. For a conventional funding of € 100,000 at an interest rate of 4.5 percent with 10 percent repayment of the borrower 8.3 years (100 installments) pays for one monthly rate of about 1200 € and has at the end of the term a total expenditure of interest and repayment of just under € 120,000. Instead of 100 installments with interest and repayment of the borrower pays 16.6 years in the JAK Bank ( 200 rates) of 1000 € and receive at the end of the term the additional accumulated over the original loan amount € 100,000 back without interest.
This member has thus receive the same amount as an interest-free loan, which it has subsequently saved up without interest. The double total running time compared to conventional loans other but to participate in the interest-free banking system also allows already during the repayment phase, the partial sums can be again made available to other members as interest-free loan.
The administrative and risk costs of the bank are covered by fixed membership fees and fees that are not subject to the fluctuations in the capital market, as opposed to the interest. As part of the bank tasks are performed voluntary basis by the members, the fees are low in comparison. For a private home loan they correspond to an effective annual interest rate between 1.5 and 2.5 percent. However, this is not to be compared with the interest rate of commercial banks, since as opportunity costs, the credit interest must be added to the waiver of the customer of the JAK member bank.