The Land, Labour and Capital bank

I came across the Swedish JAK-bank. JAK stands for: “Jord, Arbete, Kapital” or Land, Labour and Capital. The bank has 38.000 members and charges fees, not interest. Seems to work. Check it out:

Our bank. The basics:

Despite the technical changes throughout the years, there are some essential aspects that have been kept unchanged in our banking model:

– Only members use the bank. We don’t have clients.

– Members in JAK do not charge interest among each other (this was inherited from the Danish J.A.K.)

– Members in JAK who borrow money must also save money in JAK to the same proportion as the loan (this is an original construction from the Swedish JAK: our saving and loan system)

The requirement of making those members who borrow money also to save money can be seen both as a practical tool and as an ideological decision. Why?

In JAK Members Bank, the member’s deposits finance all loans. There is no external refinancing. Therefore, the stock of loans cannot exceed the member’s deposits plus the equity of the bank. To achieve this in a fair way, we in JAK have decided that there has to be a balance between savings and loans on the individual level.

JAK Members bank is a professionalized bank with around 37.000 members, holding a bank license since 1997. The administrative expenses of running the bank were 25, 7 million Swedish Crowns in 2010. These expenses are covered through loan fees and membership fees. The fact that we have a loan fee means that the loans in JAK have a cost. However, we don’t call this cost “interest” because we see an ideological difference between administrative cost and interest to the savers.

Popular Education and deep democracy

Education plays a key role in JAK Members Bank. We are a cooperative bank, own by the members and we’ve chosen a member’s strategy grounded on the Nordic tradition of Popular Education (Folkbildning). What does it mean?

The Nordic tradition of Popular Education has its roots on the popular movements of the XIX and early XX century. It is an educational tradition constructed by the people and for the people, with the purpose of educating themselves to be able to transform the communities and the societies where they live. It is a non hierarchical educational tradition where everyone shall feel that their experiences, questions and opinions is just as important as everybody else’s, where everyone shall feel that they understand and can express their experiences.

To choose Popular Education means our strategy to grow is not trough fancy and expensive marketing campaigns but instead we focus on courses, study circles and meetings, we focus on empowerment. If we, the JAK members, get a better understanding on how our cooperative bank is working it has very positive consequences, both on an extern and on an intern level.