Can Informal Rural Finance Support Rural Revitalization in China’s Ethnic Minority Regions? Evidence from the Naxi Huacong Institution in Yunnan

Huacong, a traditional system of the Naxi people in Yunnan Province, has served for generations as both a cultural symbol expressing social values and emotions and a mechanism for mutual financial assistance. Although its economic role has gradually declined, its long-standing principles of equality, mutual aid, and flexible institutional arrangements continue to provide a strong foundation for collective financing and community cooperation. From a theoretical perspective, Huacong, as a representative form of rural informal financial organization, possesses information screening, operational, and governance mechanisms that closely align with the practical requirements of rural revitalization, including targeted financial services, effective operational management, and risk control. From a practical perspective, the integration of its social and financial functions provides opportunities to strengthen the rural financial ecosystem. By reinforcing Huacong’s cultural foundations, improving its organizational governance, and integrating government support with resources from formal financial institutions, its informal financial functions can be enhanced through stronger institutional safeguards and risk management arrangements. Such efforts would enable Huacong to serve as a complementary component of rural financial services and help narrow the rural finance gap faced by ethnic minority regions in the context of rural revitalization.