Village Credit Institution is a custom-based non-bank financial institution that grows and develops within the Pakraman Village structure in Bali. Based on the philosophy of Tri Hita Karana, LPD not only functions as a financial service provider for the village krama, but also plays a role in cultural preservation, financing of traditional activities, and socio-economic development of the community. Historically, LPDs were initiated through Bali Governor Decree No. 972 of 1984 and implemented as a pilot project since 1985, then gained legal legitimacy through various regional regulations, most recently through Bali Province Regional Regulation No. 3 of 2017. Unlike the profit-based Rural Banks (BPRs), LPDs prioritize social values, kinship, and spirituality in their operations. The purpose of this paper is to examine in depth the philosophy, legal basis, and strategic role of the Village Credit Institution (LPD) in Bali, both in the context of customary law and national economic law. This research uses a normative method with a statutory and conceptual approach to examine the existence of LPDs from the perspective of customary law and economic law. The results of the study show that LPD is a model of synergy between the customary law system and modern financial governance principles, while strengthening the role of indigenous peoples in the structure of national economic law.