01/07/2023
๐ช๐ผ๐๐น๐ฑ ๐๐ผ๐ ๐ฟ๐ฎ๐๐ต๐ฒ๐ฟ ๐ฏ๐ฒ ๐๐ต๐ฒ ๐ฝ๐ฎ๐๐ฒ๐ฟ ๐ผ๐ฟ ๐ฟ๐ฒ๐ฐ๐ฒ๐ถ๐๐ฒ๐ฟ?
A family bank is a private financing system where family members make a lump sum or monthly contribution to create a capital pool controlled by the family collectively. Individual members of the family group can tap into this capital to finance purchases that would otherwise be funded using a credit facility. The terms of the loan, including repayment and interest, are decided by the family as a collective. Interest on family bank loans benefit the familyโs capital pool rather than going to a third party. Therefore, the family is on the receiving rather than the paying side of the financial system.
A family bank is a financial vehicle that allows a family to use the same methods the formal banking sector uses to create wealth through debt. Most importantly, the family bank provides a safe and controlled environment for all family members to learn, implement, and practice the skills needed to become financially literate and competent.