#5 Highlights from the “Vietnam Credit Spotlight 2025” Conference – Where Will Vietnam’s USD160bn Financing for 8% GDP growth in 2025 come from?

At the conference “Vietnam Credit Spotlight 2025” co-hosted by FiinRatings and S&P Global Ratings, leading expert speakers discussed the current state of the capital market, the challenges in raising capital, and solutions to ensure Vietnam's sustainable economic growth.

At the conference “Vietnam Credit Spotlight 2025” co-hosted by FiinRatings and S&P Global Ratings, leading expert speakers discussed the current state of the capital market, the challenges in raising capital, and solutions to ensure Vietnam's sustainable economic growth. 

High credit/GDP ratio, though the issue also lies in credit quality and allocation 

Discussing credit growth, Mr. Ketut Ariadi Kusuma, Senior Financial Sector Specialist at the World Bank, noted that Vietnam has long sought to align credit growth with GDP. However, Vietnam is still a lower-middle-income country, with a credit/GDP ratio of about 140%, double the global average of 50%. 

This is not a new problem, but an issue arises with the low efficiency of credit capital usage for GDP growth, which has not been effectively allocated to high value-added sectors. "The efficiency of credit capital in terms of GDP growth in Vietnam is still low compared to other countries," remarked Mr. Ketut Ariadi Kusuma. 

 

He also highlighted an important reality: the manufacturing sector, including FDI enterprises, is contributing increasingly to GDP, but its access to credit is not proportionate. Meanwhile, real estate credit still occupies a high proportion, mainly serving the need for real estate purchase loans.  

Mr. Ketut Ariadi Kusuma emphasized that for sustainable economic growth, credit capital must be allocated to productive sectors: “We need to focus more on the quality of credit, rather than just focusing on the credit growth itself."  

Restructuring the Capital Market – A Solution to Reduce the Burden on the Banking System 

Mr. Nguyen Quang Thuan, CEO of FiinRatings, shared that "with the target of 8% economic growth by 2025 and an estimated capital demand of USD 160 billion, capital allocation is a major challenge for Vietnam's growth. Besides public investment capital, which has clear goals and capacity, we should soon strengthen the role of the capital market to reduce pressure on the banking credit system. The role of raising medium and long-term capital via the stock market is still limited, as evidenced by the funds raised from stock issuance by listed companies being under USD 4 billion per year in 2024, and the total issuance value of corporate bonds outside the banking sector being only USD 6 billion in 2024." 

This indicates a burden and reliance on bank credit sources, particularly when bad debt levels remain high, and the capital buffer of Vietnamese commercial banks is relatively thin compared to other countries in the region. 

"Reducing the credit/GDP ratio in the short term is difficult, but in the long term, the capital market, including channels like equities, corporate bonds, and other financial instruments, needs to play a more significant role in providing long-term financial resources for the economy. If Vietnam does not soon develop its capital market, this year's high growth target and future growth ambitions will become extremely challenging. Building an effective bond and debt market will help unlock capital resources from the public, including nearly USD 600 billion in savings deposits and more than USD 90 billion from the insurance industry and pension funds," Mr. Thuân stated. 

Reforming the financial market: Upgrading Vietnam’s stock market to attract foreign investment 

According to Mr. Vu Chi Dung, Director General of the International Cooperation Department at the State Securities Commission, financial market reform is a top priority. Vietnam is actively working to upgrade its stock market from a frontier to an emerging market to attract more foreign investment. 

"There is a need for new financial products like green bonds and green credit to increase options for both domestic and international investors. At the same time, transparency must be improved, and information on risks needs to be clear. Particularly, information should be provided in English so that businesses and international investors can easily access it," Mr. Dũng shared. 

Additionally, one of the biggest current barriers is that the refinancing system is not attractive enough to large investors. Simplifying legal procedures and developing policies to support investors will help improve capital inflow into Vietnam. 

Developing the Domestic Capital Market: A Long-term Solution for the Economy 

Mr. Ketut Ariadi Kusuma stated that developing the domestic capital market is a long-term endeavor. To meet the capital needs of the economy, Vietnam must rely on credit growth from the banking system, but the remaining issue is the quality of credit. Currently, the banking system is facing pressure to increase capital and deal with bad debts. 

“Bank loans provide short-term funding, often relying on collateral and personal relationships, while corporate bonds are medium to long-term capital based on disclosures and covenants. Much needs to be done for the capital market to develop healthily and attract foreign investors' interest, thereby reducing the burden on the banking system,” Mr. Ketut Ariadi Kusuma recommended. 

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About FiinRatings 
FiinRatings, a member of FiinGroup and technical partner of S&P Global Ratings, is a licensed credit rating agency under Vietnam’s Ministry of Finance. Our services include credit ratings, green bond verification, and independent evaluations (Second Party Opinion - SPO), catering to issuers, lenders, and investors across diverse sectors in Vietnam. 

FiinRatings’ SPO services provide independent evaluations of financial instruments, policy frameworks, or transactions aligned with principles set by global institutions like the International Capital Market Association (ICMA) and the Climate Bonds Initiative (CBI). Notably, FiinRatings is the first approved verifier for CBI Climate Bond Standards in Vietnam. 

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