UNDERSTANDING THE RIOTS--SIX MONTHS LATER : Money and Power/Making It in the Inner City : LOOKING AHEAD: Visions of Darkness and Hope : “In one night, we lost everything’.

On the 25th of every month, a Korean-American liquor store owner named Joo delivered more than $1,800 she had scrimped and saved to the leader of a Koreatown kye --an underground economic kit ty, part savings bank and part credit union.

She looked forward to the day this October when her turn would arrive to collect $30,000 from the joint savings pool.

“I wanted to pay back the money my husband and I borrowed from friends and relatives to buy our store,” says Mrs. Joo, who did not want her full name used.

But in April, looters pillaged and burned her store on Avalon Boulevard in South-Central. And now, seven months later, Mrs. Joo’s dreams have turned into a nightmare.

Its members ravaged by the riots, the kye collapsed--as did another from which she had counted on receiving $50,000 next year. Moreover, the $168,000 insurance policy on her business turned out to be worthless, issued by an unlicensed offshore company.

“In one night, we lost everything we had worked night and day for for 10 years through no fault of ours,” she says. “All we have is a vacant lot in a neighborhood where people don’t want us to return. Even if the SBA approves our loan, we face the prospect of owing money which we have to repay until we are in our 60s.”

She sighs, cradling her sleeping 10-month-old son in the family’s modest two-bedroom apartment near Hancock Park, her 7-year-old son playing nearby.

Now 34, Mrs. Joo and her 36-year-old husband came to the United States a decade ago, soon after their marriage.

“I put almost $30,000 into the two kyes . That’s the money I saved by pinching pennies,” she says. “I didn’t buy clothes. I didn’t eat well. We couldn’t even take our children to Disneyland because we stayed open every day. People who burned our store have no idea of the sacrifices we made. We thought if we persevered, after we pay off the debts, we could save for a small house. I dreamed that one day I could even stay home with the children.

“Now, I’ve been forced to stay home because they’ve made me jobless. Not only did I lose the money and material possessions, but I lost my credibility, too. I feel like a sinner when I face the people who loaned us the money. I promised to pay back as soon as I got the kye money. There are days when I feel like I’m going to lose my mind. I’m physically and mentally exhausted. My head feels dull. I can’t remember things.”

Since kyes operate outside the banking system, Mrs. Joo--like other victims of failed funds--has no legal recourse. It’s impossible to ascertain the precise number of kyes that have collapsed since the riots. Members are secretive. But numerous Koreatown business people believe that more than 60 have gone bust.

The worst is yet to come, they say, as people deplete their savings and run out of places to borrow money.

“Han - shim hae-yo, h a n - shim hae-y o , “ Mrs. Joo repeats, like a refrain from a sad song. It’s an expression Koreans use when all has failed and they feel only hopelessness; roughly, it means that there seems to be no way out.

“There are wives who are suffering silently because they invested in a kye without telling their husbands,” she says, revealing a hidden feature of Korean family life. “I hear there are women who lost $120,000, but they can’t even talk to their husbands. Can you imagine what these poor women must be going through?”

Kye (pronounced kay)--an indigenous system of mutual aid that began centuries ago to provide for village events, weddings and funerals--crossed the Pacific with Korean immigrants as they arrived by the tens of thousands in the 1970s and ‘80s. The informal banking system enables many immigrants to pay for a car or make a down payment on a business. Though the word kye means “contract,” there is no written agreement. Kye operates on trust.

Among the more affluent and leisurely, monthly meetings of 10 to 50 kye members become important social occasions; some kye sessions take the form of a dance or dinner. But in Mrs. Joo’s kyes, only about half of the members even showed up for the monthly meetings; most were too busy running their businesses.

“Sometimes when I was busy, I delivered the money to the kye ju (leader) on the day of the meeting or on the night before,” she recalls. “I didn’t even know some of the members. But I joined because I had heard that the kye ju had produced good results for 10 years.”

Now, Mrs. Joo has more time than she knows how to use. Her older son is glad to have her home. But seeing her so dejected, the boy tries to cheer her up.

“Don’t worry, Mommy,” he says. “I’ll buy you a market with the money in my piggy bank. I’m going to buy you a market that won’t burn.”

“How can there be a market that doesn’t burn?” Mrs. Joo says.

“Mommy, it will be made of silver,” the child replies. “Like the coins in my piggy bank.”