For Korean Shopkeepers, Unrest Dims Prospects Success
SOUTH CENTRAL LOS ANGELES
IN a vast warehouse called "Swap Meet" on West Venice Boulevard in Los Angeles, dozens of Korean merchants have set up booths to sell their wares. The communal hall is one of many around the city where Koreans lease a small amount of space, and fill every available inch with goods they buy at wholesale prices.
"This is the first stop for many Koreans who don't come to the United States with a lot of capital," says Paul Hudson, president of Broadway Federal Savings Bank, whose institution shares a big parking lot with the Swap Meet. "The question is, can they graduate from here?"
Mr. Hudson, whose family-owned bank was founded in 1946, caters to a mixed black and Latino customer base, reflecting the city's growing number of immigrants from Central and South America. Koreans, he says, are the tightest minority community in the area.
Unlike other minorities that tend to transact with banks, many Koreans prefer their own well-developed informal financial network - the "kye" system, a rotating credit union that draws in family and friends.
If 10 people get together every month and put $10,000 in the pot, one person can take out $100,000. In these times of tight credit, it has been an excellent source of financing.
Swap Meet booth owners who do well often rely on that money, says T. S. Chung, a lawyer who represents a host of Korean-owned businesses in the US.
From their small booths, Mr. Chung says, some Koreans have charted a successful course by moving to big regional shopping malls, and then on to become wholesalers, distributors, and manufacturers.
He estimates that out of the roughly 400,000 Korean Americans who reside in Orange County and Los Angeles, "close to 20 percent are self-employed business people - 90 percent of whom are small, with sales under $1 million."