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Jak Bank – interest free ethical borrowing becomes a reality in Sweden


Ever wished there was a bank which was actually driven by more humanitarian goals than merely making more profit? Yes there are credit unions, cooperative and community banks, but they almost all still revolve around the idea of interest payments on loans and savings. What about a bank that did away with all that, and tried a different approach altogether?

The Jak Bank [translation] in Sweden is just such a venture. The bank’s goals revolve around ‘sustainable economic relationships‘, which means that the owners, who are in fact the members themselves, do not pay or receive interest on their loans, but instead rely on a system of Savings Points in order to survive and thrive.


As described in this nice little report, to bank with Jak you need to become a member, pay a small joining fee (around €22) and pay a membership fee of €22 a year. Once they have been saving with the bank for six months, they can then apply for an interest free loan, which is granted subject to certain rules regarding ability to pay back etc. Every loan is secured on a member asset, and 95% of loan applications are granted.


It’s a virtual bank, so no branches, and the ideology stretches way beyond just savings and loans, in that the membership are also encouraged to help with the administration and growth of the bank in general. For instance the bank’s main site is currently soliciting for any member who is experienced with open source programming to help develop an Android smartphone app for the bank.


There are currently 38,555 members, spread over seven Swedish cities, and members are also entitled to vote at the general meeting, decide who they want on the board of directors and propose different options for the running of the bank in general. Very democratic in the full meaning of the word. The bank has also recently started offering savings free loans for small local community businesses which are engaged in environmental or community activities, which falls in line with the overall vision of the bank to help the community.


All in all, this sounds like the perfect bank, and one which offers hope that the future may be able to operate without the unsustainable, infinite growth model we have today. Of course running a tiny virtual bank in a local region is a long long way away from scaling up to something that could be used nationwide, but maybe that’s the whole point? Perhaps the localization of the future will involve more than just relying on local food supplies and transport?

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