JAK Bank: The best Islamic Bank in the world

JAK Bank, Sweden

I was puzzled when someone did asked me about bank that really implement Islamic principle without copy and paste from the conventional system. After a long period, finally i found the answer. The answer is in Sweden. Yes. It is in Sweden! to be more particular is in Skovde, a small town in Sweden. It's about 350 km from Stockholm, the capital of Sweden. I was impressed once i read about their effort of establishing this bank.

JAK Bank

JAK bank is a members bank with 34,000 spread all over the country that loan their money among them, by passing the traditional banking system and using their bank like a shared money box. Its aim to create an alternative model of no speculative finance, serving people and little entrepreneurs.

"As an economic associations, we don't have any big owners that demands more profit and so on because all the 34,000 members own the bank together", said Magnus Frank, the JAK Bank manager. That means every member gets only one share of the bank and has the same power when it comes to the election of the board.

The purpose of JAK bank is not making money but to offer a loaning and serving service to its member in the most sustainable way stressing an interest free idea of economy. They agreed that interest transfers money in the wrong way because people that already have a lot of money can get more money just because they own money and people don't have any money get less and less money. This is because they have to pay the interest to take a loan for buying a house or whatever they want the loan for.

Meanwhile, Margrit Kennedy, the economist and founder of the idea of JAK bank also had same ideas about the badness of the interest based system. She said,"the most people think they pay interest only when they borrow money in the bank and in fact it's quite obvious that every producer of goods has to add the interest that he pays to he bank to the final price. If you look at everything people need to live roughly 45% of the price goes on interest-fees"

According to her researches, the hidden interest on what we spend for our living is roughly 45%. She said, "If you look at who profits from this interest payments and who pays you can see, if you divide the Germans population in 10 equal parts, you can see that 80% of the people pay more interest in the prices that those other people who work for their money and 10% of German people who pay as much interest as they get from interest profit from their life insurance, savings etc. And remaining of 10% earn all the money that comes from the interest which the former 80% of the people loose. (continued)