Interest-Free

Why interest-free?

We regard receiving money in exchange for labour as legitimate; however we do not consider it legitimate to earn money simply with money. In our opinion it is unethical to lend money against interest.

The use of interest also has negative effects on society. It shows up in the prices of services and goods when producers add to their prices to cover their cost of interest on loans. In an interest economy money is moved from those who have less to those who have more and thereby assets are concentrated in the hands of the few. Finally, since our modern monetary systems are debt-based and practically all money is debt that has to be repaid with interest, we have a money stock that is always growing exponentially. Anything that grows exponentially will eventually reach a breaking point. Today we have exponential growth in both real and financial assets including money.

For these reasons the ultimate goal of JAK is an interest-free economy. In order to promote interest-free economics we:

- offer banking services based on an interest-free savings and loan system (see above)

- support the JAK Community Dialogue.

The JAK community dialogue

A relationship in which money is involved is always a matter of trust. Knowledge about our interest-free idea and our activities is best spread by word of mouth among people who know each other. Hence our marketing is based on the dialogue that members have with other people about the economy and about interest. Our organization supports all members in this dialogue.

The number of members has been increasing steadily. There were 19,000 members in 1991 and there are now 33,000 members (2007). There was a 7 percent increase in members over the last 12 months. 600 members want to promote the JAK model actively. Most of them are also members of local JAK branches. These branches are not engaged in our banking activities apart from sharing information about our products. They are mostly engaged in the civil society dialogue about our money and banking systems.

Our magazine Grus & Guld (Gravel and Gold) supports all members’ dialogues and seminars while active members also receive financial support from their branch for their local activities. We educate JAK members in interest-free economics, banking and other relevant subjects. In addition we arrange meetings to support the internal dialogue that is so important for those who really want to talk about JAK with others.

Of course we own a bank!

We needed a bank and we wanted it to operate according to our ethical standards. And we did not want to be exploited. Therefore we created our own bank.

We want another world – just and fair
JAK is an association that actively engages in the economic rules of our society. Our bank is a practical example of a just and fair economy and that another world is possible. JAK is different because it is interest-free.

Other banks profit from the borrowers by charging a fee. Interest payments are a major part of most people’s total payments. Remember that you do not only pay interest directly to the bank. It’s also part of the price you pay for goods and services.

Producers, shipping companies, wholesalers, retailers and others in the production chain all pay interest. Naturally they add to their prices to cover their interest costs. In the end the consumer pays most of the interest costs that have accumulated in the production chain. As much as half of any price at any given store may be covering interest costs accrued earlier. In housing it is even higher; estimates come close to 70 percent.

A real interest-free bank
Known simply as JAK, the JAK MEMBERS BANK is the first bank in Sweden, and perhaps the world, where members share the benefits of a viable, interest-free banking system that they themselves take responsibility for. JAK was established as a co-operative savings and loan association in 1965 and was granted official bank status by the Swedish government on the recommendation of the state's Financial Supervisory Authority in December 1997. Because JAK is officially recognized as a bank, the savings of members are covered by the Swedish banking system's deposit guarantees. This official recognition also confirms that JAK has an approved structure and management and that it offers a viable, trustworthy and interesting alternative to other banks. The main function of JAK is to provide members with interest-free savings loans.

A national focus but …

We accept deposits and we give loans in Swedish Crowns (SEK). We give loans on mortgage or with personal guarantees but the property or the guarantor has to be Swedish. Hence there are few foreigners among our members.

There is growing interest in the JAK system and we do take part in international discussions on interest-free banking. However we are not seeking partners for an international expansion of JAK yet we will do what we can, with our limited resources, to convey our knowledge and experiences to parties interested in similar systems in their own countries.