Final answer:
Rotating credit associations, known as gye, were essential in allowing Korean immigrants to set up their own small businesses.
Step-by-step explanation:
Rotating credit associations, known as gye, were essential in allowing Korean immigrants to set up their own small businesses. Gye is a traditional Korean financial practice where a group of individuals contribute money into a fund, and each member of the group takes turns borrowing the total amount. This system provided the necessary capital for Korean immigrants to start businesses, as they faced financial dependency and limited access to traditional sources of credit.
The practice of gye allowed Korean immigrants to pool resources and support one another, fostering economic independence within their community. By participating in these rotating credit associations, Korean immigrants could access funds to start businesses, purchase goods, and establish themselves as entrepreneurs. This enabled them to overcome financial barriers and build their own small businesses in sectors such as hair-care products for the African-American market.
This practice of rotating credit associations, or gye, has historical roots in other parts of the world as well. For example, in fifteenth-century Italy, credit was widely used among merchants, and small family-owned businesses and large companies flourished. Similar risk-sharing business ventures and joint investment schemes were also common across Europe. Thus, rotating credit associations have played a significant role in various historical contexts, contributing to economic opportunities for marginalized communities.