Where is the 'key' for the private sector to reach 60% of GDP?

Experts point to the urgent need to restructure the entire financial system and remove capital-flow bottlenecks. Only then can the private sector contribute more to economic growth.

Experts agree that it is necessary to restructure the entire financial system and remove bottlenecks. Photo: DP

"In recent years, the bond channel has become the 'culprit' that pushed all capital demand onto bank credit," Mr. Tran Hoai Nam, Standing Deputy General Director of HDBank, recently assessed frankly about one of the "bottlenecks" of the capital market as the economy pursues ambitious growth targets.

In fact, the pressure to supply capital to the economy is growing ever larger while bank credit is still the dominant channel for channeling capital. Meanwhile, the corporate bond market has not fully recovered after the period of volatility, and the stock market still lacks the depth to take on the role of providing medium- and long-term capital.

This makes it difficult for many businesses, especially in the private sector, to access the capital needed to expand production and business. The private sector currently contributes about 50% of GDP and creates more than 80% of jobs, yet its capital needs still depend mainly on the banking system.

Against this backdrop, the current problem is not only about adding more liquidity to the economy but about unclogging the channels for channeling capital, creating a balance between bank credit and the capital market so that money is allocated more efficiently and sustainably.

Unclogging capital flows and the institutional problem

At the seminar "The private economy in the nation's era of rising," organized by the Vietnam Securities Economy e-magazine in coordination with the Nguoi Quan Sat financial media ecosystem, experts agreed that what is needed is to restructure the entire financial system and remove bottlenecks so that capital flows more smoothly and efficiently.

Heavy dependence on bank credit is becoming a "hot" problem for the economy. Outstanding credit is currently equivalent to about 146% of GDP, while the capital market accounts for only about 15-20% of total funding, much lower than the 60-70% in developed countries.

The market capitalization of Vietnam's stock market is currently around 90% of GDP, still a considerable distance from Thailand or South Korea. Meanwhile, the corporate bond market has reached only about 10% of GDP.

Mr. Nguyen Duc Thong, General Director of SSI Securities, said this imbalance shows that capital is not only scarce but also has not reached the right place at the right time.

Private businesses, especially small and medium-sized ones, often find it hard to access long-term capital because banks prioritize collateral and short lending cycles. Conversely, the capital market is not yet attractive and stable enough to take on the role of channeling medium- and long-term capital for the economy.

From this reality, many opinions at the seminar held that sustainable growth requires more far-reaching changes. The economy cannot continue to rely mainly on credit expansion.

What needs to be built is an interconnected financial ecosystem, where institutions are more open, banks play a leading role, the capital market develops firmly and businesses proactively enhance their governance capacity.

From the perspective of banks - the main pillar of capital flows today - Mr. Tran Hoai Nam said the role of the financial system is also changing strongly. As the economy pursues the target of double-digit growth, banks cannot merely play the role of "pumping capital" but must become the "leader of capital flows."

Mr. Tran Hoai Nam says banks must become the "leader of capital flows." Photo: HT

HDBank itself is now shifting toward designing financial solutions along the value chain, closely following the business cycle and actual cash flows of businesses rather than focusing only on collateral.

"For small and medium-sized businesses, the core factors are still financial transparency and a clear business strategy," Mr. Nam shared. The bank is ready to accompany and advise businesses to develop sustainably. At the same time, it needs to participate in the supply chain to make cash flows clearer, thereby making it easier to access cash-flow-based credit.

Toward a multi-channel approach

In parallel, expanding international capital channels is also seen as an important direction. Mr. Nam said the bank has been supporting businesses in accessing the international bond market, typically in London, where transparency in financial reporting is valued rather than reliance solely on the highest credit rating.

Vietnam is an attractive destination thanks to positive economic growth and strong FDI flows. However, to seize this opportunity, businesses need to prepare better in terms of financial reporting standards and governance capacity.

Mr. Nam also pointed out another bottleneck in the domestic bond market: the regulations on professional investors are still quite strict, making it difficult for idle funds from businesses to participate in the market. If this scope is expanded, capital will flow more efficiently and reduce pressure on the bank credit system.

From the perspective of the equity market, Mr. Nguyen Duc Thong said the stock market needs to take on the role of channeling medium- and long-term capital for the economy. Two major bottlenecks currently exist: a shortage of quality goods and an imbalanced investor structure.

About 90% of transactions on the market still come from individual investors, making the market easily swayed by short-term sentiment. Meanwhile, the market capitalization of businesses outside the real estate and financial sectors accounts for only about 40%.

After the volatility of the 2022-2023 period, information transparency is seen as the key to restoring market confidence.

Converting to the international accounting standard IFRS will make it easier for foreign investors to assess businesses. At the same time, it is necessary to promote the participation of institutional investors, especially pension funds and professional bond funds, to increase the market's stability.

For the corporate bond market, Mr. Thong said there are three main causes of the congestion: declining investor confidence, a lack of institutional investors and barriers to issuance.

The solution lies in enhancing transparency, simplifying procedures and creating more favorable conditions for manufacturing and technology businesses to list on the market.

On this basis, a top securities company like SSI is ready to commit to accompanying the effort so that the capital market truly becomes an effective supporting channel for the target of double-digit growth in the 2026-2030 period.

From the perspective of the state regulator, Ms. Le Thi Viet Nga, Vice Chairwoman of the State Securities Commission, continued to emphasize the "backstop" role of the stock market. In 2025, the market raised about VND744,000 billion, up nearly 43% year on year.

Vice Chairwoman Le Thi Viet Nga emphasizes the "backstop" role of the stock market. Photo: HT

According to Ms. Nga, businesses need to shift from a mindset of passively accessing capital to actively raising capital, treating the stock market as part of a long-term development strategy. Key solutions include continuing to improve institutions, diversifying products, developing institutional investors and strengthening market supervision.

She also believes that green finance will become a prominent trend from 2026, in which green bonds and sustainability bonds could strongly attract global ESG capital flows.

When the channels for channeling capital are effectively connected, money will arrive at the right place, at the right time and at the right maturity. Then, the private sector will not only solve the capital-hunger problem but also have an additional foundation to enhance its competitiveness and contribute more to economic growth.

"The target of the private sector contributing 60% of GDP by 2030 is entirely feasible if solutions are implemented resolutely and in a synchronized manner," Ms. Nga assessed.

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Source: TheLeader — theleader.vn. This article is republished for the purpose of sharing knowledge with the community of founders and investors in the HCM VIF ecosystem.