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Interest Free Co-operatives: A study of JAK Members Bank – Sweden
University of Gävle, Faculty of Education and Business Studies, Department of Business and Economic Studies. (International Culture management)ORCID iD: 0000-0001-9080-2629
University of Gävle, Faculty of Education and Business Studies, Department of Business and Economic Studies.
2013 (English)In: Decentralisation and Development: Experiences and Experiments / [ed] P.P. Balan, Sunny George and T.P. Kunhikannan, Thrissur: Kerala Institute of Local Administration (KILA) , 2013, 64-85 p.Chapter in book (Other academic)
Abstract [en]


This study analyses how the system of an interest-free cooperative bank is operating and its advantages. JAK is running an interest-free loan and savings system for individuals, small companies and associations. JAK´s philosophy and values are based on the principle that no one should earn money by passive owning of money lending them to others and thus JAK question the traditional financial system.



We study in depth the case of JAK Members Bank. Qualitative data is collected in form of semi-structured interviews and direct observations. Seven people have been interviewed in 2010 and 2012.



Our research shows that JAK- Members Bank creates relations with the members by communicating their value base as a cooperative organisation. They get advantage to attract new members by stressing democratic management and members´ sovereignty, educating members, supporting ecological projects, involving young people, networking with people and organisations locally and globally and using relationships and mouth to mouth marketing.  By applying an interest-free saving-borrowing principle the bank succeeds getting people together in a financial alternative relationship. For the enlargement of the market and members participation it is a need for innovations to complete their financial services as a bank and sustain their business. Despite its success, new entrepreneurial activities face difficulties because of lack of access to financial resources which limits JAKs presence and business development.


Research Limitation

This research is based on a single case. In future research, similar in-depth studies in Sweden or other countries can show how interest-free banking functions, and the results can be compared with the current study.



The study contributes to the literature by presenting a model of successful operation of JAK a cooperative bank. We recommend managers to develop networks with members and other stakeholders to promote cooperative banking activities and social entrepreneurship in the local economy.  The structure of the global financial system and its contribution to development is an emerging and challenging issue, can local cooperative banks be considered as a viable local financial initiative?  


Originality value of the paper

In this research work we developed a theoretical model by combining cooperative identity and cooperative values in a successful operation of an alternative interest-free bank.

Place, publisher, year, edition, pages
Thrissur: Kerala Institute of Local Administration (KILA) , 2013. 64-85 p.
Keyword [en]
Cooperative, JAK Members Bank, Interest-Free Economy, Sustainability, Sweden
National Category
Economics and Business
URN: urn:nbn:se:hig:diva-18578ISBN: 978-81-925633-7-4OAI: oai:DiVA.org:hig-18578DiVA: diva2:772953
Available from: 2014-12-17 Created: 2014-12-17 Last updated: 2015-06-03Bibliographically approved

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