Overcoming the IMF Crisis: The Power of Busan Citizens

This transformation was a natural development based on Busan's geographical advantages.

During the Korean War, Busan became the provisional capital, serving as a national lifeline and a refuge for displaced people. This demonstrates that Busan played a crucial role in national crisis situations, beyond being just a local area.

Ulsan became the heart of heavy chemical industries, while Changwon and Geoje grew into key hubs for machinery and shipbuilding industries, significantly contributing to national economic development.

As these local industries developed, the need for regional financial institutions capable of supporting their growth increased. This was crucial for local capital to be reinvested into local industries, creating a virtuous cycle.

This awareness resonated with local businesspeople and citizens.

As a result, in 1967, local businesspeople and citizens united to establish Busan Bank. This was a strong expression of their will to enable local capital to circulate within the region and contribute to Busan's industrial and economic development.

This focuses on comprehensively evaluating a company's future growth potential and the manager's commitment, rather than solely relying on collateral or financial statements.

Relationship-based finance means that banks and companies primarily form long-term relationships, providing various financial services based on that relationship. Through this, companies can secure stable funding, and banks pursue a model of co-growth through the companies' success.

Gyeongnam Bank played a crucial role in regional economic development by supporting the growth of businesses in the Gyeongnam region, including the Masan Free Export Zone.

In the early financial environment of the 1980s, many entrepreneurs faced difficulties raising funds, resorting to private loans, and were in tough situations. One Sasang Industrial Complex founder, too, faced a crisis after being denied financial support by other banks, but he testified that he was able to maintain his factory thanks to Busan Bank's active support.

This founder stated that while another bank hinted at possibilities but ultimately didn't provide support, Busan Bank willingly provided funds, allowing him to continue his business to this day. This is an example of Busan Bank boldly investing in a company's potential through relationship-based finance.

In the early financial environment, the reliability of corporate financial statements was low, making it difficult to accurately assess a company's value with only quantitative evaluations. Therefore, banks primarily relied on qualitative assessments for loan screening.

The core of qualitative assessment was understanding the manager's mindset and commitment to the business. They directly checked the office atmosphere, cleanliness, the age and dustiness of inventory, etc., to assess the overall management status and potential of the company.

This method clearly demonstrates the characteristics of relationship-based finance, which values the people leading the business, their passion, and the actual on-site situation more than collateral or numbers. Banks decided on investments by placing greater value on entrepreneurial spirit and future growth potential.