Hui (informal loan club)

Hui (traditional Chinese: 會; simplified Chinese: 会; pinyin: huì; Vietnamese: hụi; lit. 'group, association') refers to a group-based rotating saving and credit scheme that is popular among many immigrant and migrant communities throughout the United States[1] and Taiwan.[2] Biao Hui (simplified Chinese: 标会; traditional Chinese: 標會; pinyin: biāo huì; lit. 'to bid in Hui', Vietnamese: chơi hụi, lit. 'to play in Hui')[3] is the verb when someone is engaging or participating in Hui.

Process

The basic premise of the model is a group of close friends and family members coming together once a month and contributing a fixed amount of the money into a money pool. Every time, one member of the group will be chosen to withdraw the entire lump sum from the pool, often for purpose of down payments towards houses or cars or to start a new business. When the same group of people comes together again in the subsequent month contributing the same fixed amount, another member of the group will be chosen to take the lump sum. This process is repeated until every member in the group had a chance to withdraw the lump sum in a given month.[4] Contributions can involve not only money but also tradable assets like gold or rice, particularly in rural Vietnamese contexts.[5]

Role of the leader

A hui is typically initiated by a trusted individual within a community who assumes the role of group leader, responsible for recruiting and approving members; while participants may recommend friends or relatives, final approval rests with the leader. In Vietnam the leader (chủ hụi) is often a woman who organizes groups within family or community networks, emphasizing trust and social ties, and may receive a commission for management.[6] The group leader bears liability for fraud, embezzlement, or default, and if a member fails to meet obligations the leader is expected to cover the losses to protect the group.[7] Leaders often host meetings at their residence to collect contributions and manage borrowing requests, and are commonly granted priority access to pooled funds as compensation for the associated risk and administrative work.

Differences to other schemes

Unlike similar schemes in other cultures, where all the savings and borrowing among the group members are interest-free[8] and the order of the withdraw are determined by the group leader, Hui adopts a market-driven interest rate approach: In any given month, all members currently interested in taking the money pot have to submit an interest amount they are willing to pay to the group. Typically the person who is ready to pay the highest interest will receive the pot, with the interest amount being evenly disbursed among the other group members. Typically, the interest payments are higher and more competitive during the early months of the Hui, and tend to decrease towards the end of the Hui.

Risks

Common issues include defaults, where a member fails to contribute after receiving the pot, or fraud, such as the organizer absconding ("giật hụi" in Vietnamese). Scheme collapses ("bể hụi" or "vỡ hụi") have led to losses of billions of VND in Vietnam, often in rural areas where participants lack written agreements.[6] In the US, cases among Korean and Chinese immigrants have resulted in financial losses and damaged relationships.[9]

Legality

Vietnam

Hui is legally recognized under Article 471 of the 2015 Civil Code, with interest capped at 20% annually.[6]

Online model

Digital platforms have modernized hui, with apps like Esusu, eMoneyPool, and Mission Asset Fund offering features such as payment protection, credit reporting, and group fund management.[9] In Vietnam, e-wallets like MoMo and ZaloPay include group features that have been adapted for online hui, though this has led to misuse and fraud cases.[6]

See also

References

  1. ^ ARAX, MARK (1988-10-30). "Pooled Cash of Loan Clubs Key to Asian Immigrant Entrepreneurs". Los Angeles Times. Retrieved 2020-10-02.
  2. ^ Rigger, Shelley (9 October 2013). Why Taiwan matters : small island, global powerhouse (Updated ed.). Lanham. pp. 52–53. ISBN 978-1-4422-3002-6. OCLC 868971064.{{cite book}}: CS1 maint: location missing publisher (link)
  3. ^ Lulu Chen (22 October 2009). "For Chinese Immigrants, Money Pools Offer a Risky Promise". Retrieved 18 January 2016.
  4. ^ Matthew Forney (15 November 2004). "China's Shadow Banks". TIME. Retrieved 18 January 2016.
  5. ^ "Thận trọng khi tham gia chơi hụi". Deposit Insurance of Vietnam. Retrieved 7 October 2025.
  6. ^ a b c d Trang, Trịnh Vũ Lam (2024-01-27). "Chơi hụi - Kiểu tiết kiệm an toàn hay tiềm tàng nguy hiểm?". Vietcetera (in Vietnamese). Retrieved 2025-10-07.
  7. ^ Mark Arax (30 October 1988). "Pooled Cash of Loan Clubs Key to Asian Immigrant Entrepreneurs". Los Angeles Times. Retrieved 18 January 2016.
  8. ^ Shereen Marisol Meraji (6 April 2014). "Lending Circles Help Latinas Pay Bills And Invest". NPR. Retrieved 18 January 2016.
  9. ^ a b Kim, Dakota (2018-05-30). "The Radical Economics of Lending Your Friends Money". VICE. Retrieved 2025-10-07.

the influencer is known as the banker in some Caribbean Island s e.g. Jamaica. There are often informal agreements among members to give the banker a "smalls" amount out of their draw as appreciation for the Banker's trouble of coordinating and collecting and paying over the "draw" to the member whose turn it is.

allikas: https://en.wikipedia.org/wiki/Hui_(informal_loan_club)