Prepared for the Berinoh committee · July 2026עברית

The Contract Savings Loan Scheme:
how families fund each other's weddings

Families pay in a small amount each month for years. In return they receive a large interest-free loan when a wedding comes, and they pay that loan back so the next family can be helped. This page lets you change every rule of the scheme and watch what happens over the next fifty years.

Diagram of money circulating between families and the fund Saving families paying in monthly   The fund balance carried forward   Wedding loans funded during the year   new money in   loans out   loan repayments in   new families joining

 

Where each pound of lending comes from

0%

 

New family moneyRepayments recycled

One family's journey

The same £4,800 does two jobs: half is the family's own savings, half is what keeps the fund alive for everyone else.

Test the scheme yourself

Start with a ready-made scenario, then change anything you like. Every chart below updates as you type.

What families pay

The remainder is the community contribution that keeps the fund going.

The loan and the members

Use a negative number to model a shrinking community.

What could go wrong

Leavers get their own savings back. The community contribution stays.

Running the fund

Money kept aside rather than lent, so families can be repaid on demand.
0 means enrolment continues. Set 20 to test what happens if the scheme closes to newcomers.

Where the scheme stands at the end of the period

The picture that matters

In the early years almost every loan is paid for by families still saving. As repayments build, the fund increasingly pays for itself.

What if nobody new ever joined again?

This is the question a committee should always ask of a scheme like this. Set a run-off year in the controls above and these figures answer it.

Year by year

Every twelfth month of the run.

This is not a new idea. Germany has run it for a century.

The closest established parallel is the German Bauspar system, run by institutions called Bausparkassen. Savers join a collective and commit to paying in a fixed monthly amount. Once they have accumulated a set share of their target sum, and have held those savings long enough, they acquire the right to a low-cost loan for the rest. The earliest savers help fund the loans of later savers, and while a member is saving they are a creditor to the collective, becoming a debtor once they draw their loan.

Two features of the German design map directly onto this scheme:

  • Members must save first and are allocated their loan only when the collective can fund it, which is the same rationing our waiting list performs.
  • Allocation is decided by a valuation score built from how much a member saved and for how long, described as a time-by-money system. Our first-come-first-served list is a simpler version of the same fairness principle.

The differences are that Bausparen funds housing rather than weddings and charges a low rate of interest, where this scheme is interest-free and the community contribution takes the place of that interest.

Further reading: Verband der Privaten Bausparkassen · The Bauspar system in Germany (English, PDF) · BaFin consumer guidance

Britain has its own precedent too. The first building societies, beginning with Ketley's in Birmingham in 1775, were terminating societies: members paid into a pot, and as each pot filled another member was housed, until everyone had been served and the society wound up. This scheme keeps that idea but is designed to renew itself rather than close.

What this model assumes

  • Families pay in from the month they enrol and stop once they have reached the full paid-in target or have received their loan.
  • When a family reaches the front of the list, any shortfall against the full target is paid at that moment, and that money is available to help fund the same month's lending.
  • Loans are paid out whole. If the fund cannot afford a complete loan, that family waits until the following month.
  • Repayments begin the month after a loan is paid out. Because the family's own savings cover the closing instalments, cash repayments stop early and the fund keeps the community contribution.
  • Cash that is not lent stays in the fund and is available the following month. Nothing sits idle.
  • Families are served strictly in the order they enrolled.
  • Loans that stop being repaid are modelled as a steady annual rate applied to loans still in repayment, with any recovery arriving after the stated delay.
  • Running costs are taken out of money received before any lending decision is made.
  • The reserve is measured against the savings the fund would owe waiting families, and is never lent.
  • Results scale with size. Doubling enrolment doubles the money and leaves waiting times and percentages unchanged.
  • Every figure here follows from the rules you set on this page. Whether those rules and rates are realistic is the committee's judgement, not the model's.