History of Saving with Building Societies

Buildings savings »  History of Saving with Building Societies

Beginnings of saving with building societies in Germany

The first building and loan society was founded in the country of our largest neighbor already on 1885 as the „Building and Loan Society for Everybody“ by pastor von Bodeschwingh in Bielefeld. The greatest boom of saving with building societies came between 1924 and 1929, when it was necessary to acquire finance for housing for new construction and reconstruction after the WWI.

Towards the end of the thirties, the first principal change was made in the system. An assessment number was introduced as a criterion for acquiring a loan, replacing the then existing system based on drawing lots. After the currency reform in 1948, the period of „economic miracle“ began along with further intensive development of saving with building societies. At that time, Germany was lacking about 5–6 million apartments. In 1948, the number of contracts slightly exceeded 300,000, and 23 years later, there were more already than 12 million contracts executed.

In 1973, Act on Saving with Building Societies became effective, creating a united framework for the mentioned business. In respect of saving with building societies, the beginning of the eighties was rather weak, as thanks to generally favorable economic situation and the growth in the incomes of population, the situation on the housing markets quietened as well. The situation significantly improved after 1990.

Saving with building societies has as well a long tradition in Austria.

Saving with Building Societies in Europe and in the Czech Republic

In the first half of the nineties, saving with building societies began to develop in the Czech Republic, but also in Slovakia and Hungary. Thanks to positive experience with the system functioning, another countries become interested in its introduction.

The system of saving with building societies begins in Croatia, Act on Saving with Building Societies has been recently approved in Romania, and governmental bodies of China seems to be interested in the system as well.

Saving with building societies was introduced in the Czech market upon passing of Act on Saving with Building Societies and State Support of Saving with Building Societies no. 96/1993 Coll. With its ten years o existence, it forms one of the latest banking products.

Since its beginnings, saving with building societies has found a strong position among the other banking products.

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