Published on: 2026-08-05
On 27 July 2026, the Government approved the Master Plan for Comprehensive Reform of Vietnam's Financial Market in support of sustained high growth through 2045 under Decision No. 1413/QD-TTg. The plan seeks to establish a more balanced financial system in which the capital and securities markets play a greater role in providing medium- and long-term funding for businesses and the wider economy.
By 2030, Vietnam aims for foreign investors' assets in the capital and securities markets to reach approximately 15% of GDP, while the total net asset value of securities investment funds is targeted at 5% of GDP. Pension fund assets are expected to grow by an average of 11.5% annually between 2026 and 2030. The plan also prioritises the development of investment funds, pension funds, insurance companies and financially capable institutional investors to create a more balanced market structure between institutional and retail participation.
The reform agenda comes as the economy's demand for capital continues to rise rapidly. Vietnam's GDP expanded by 8.18% in the first half of 2026, while gross capital formation increased by 15.2%. The Government has also set a GDP growth target of at least 10% for 2026, alongside the requirement to maintain macroeconomic stability.
According to EBC Financial Group ("EBC"), sustaining a high-growth trajectory over the long term will require Vietnam not only to mobilise more capital, but also to change how that capital is formed, priced and allocated. The banking system will remain a foundational pillar, but it should not be expected to bear the entire burden of financing long-term requirements in infrastructure, energy, technological innovation and industrial upgrading.
Sana Ur Rehman, Senior Market Analyst at EBC Financial Group, commented: , "Vietnam's financial market reform should be viewed as a transition from expanding the volume of credit towards improving the quality of capital allocation. Banks will remain a core pillar of the financial system, but high and sustainable growth requires the economy to connect long-term savings with investment projects of corresponding maturities. The further question is whether capital can be directed towards the sectors and activities capable of raising productivity and strengthening economic competitiveness."
Bank credit remains the primary source of financing for Vietnam's economy. As of 29 June 2026, total system-wide credit outstanding had reached VND 20.03 quadrillion, an increase of 7.73% from the end of 2025, adding approximately VND 1.4 quadrillion to the economy within six months. The State Bank of Vietnam has indicated a credit growth target of around 15% for 2026. Bank lending therefore continues to play an essential role in financing working capital, production and business investment.
However, infrastructure, energy, technology and green-transition projects typically have repayment horizons that extend beyond conventional credit cycles. According to the World Bank, Vietnam requires approximately USD 30 billion in infrastructure investment each year, while the cumulative infrastructure financing gap between 2019 and 2040 could reach USD 94 billion. The economy's relatively high dependence on bank financing is also evident in its historical capital-mobilisation structure. Between 2019 and 2023, Vietnam raised an annual average of approximately USD 53.5 billion through the banking system, compared with only around USD 2.9 billion per year through the equity market.
According to Rehman, this gap does not mean that Vietnam should mechanically restrict credit growth. The central issue is to establish an appropriate division of roles across the financial system. Bank lending, equity markets, corporate bonds, investment funds, insurance companies and pension funds should complement one another, rather than concentrating most corporate financing requirements on the balance sheets of credit institutions.
Vietnam's stock market has expanded significantly in both size and participation. By the end of April 2026, total market capitalisation had reached approximately VND 10.5 quadrillion, equivalent to around 82% of Vietnam's 2025 GDP. The number of securities accounts had risen to nearly 13 million, an increase of more than 29% from the end of 2024. The bond market has also become a significant component of the financial system. By the end of 2025, the total market had reached approximately VND 3.93 quadrillion, equivalent to 30.7% of GDP.
Market capitalisation, however, reflects the value of assets being traded and does not directly indicate how much new capital is being channelled into businesses. Similarly, high liquidity enables investors to transact more efficiently, but does not necessarily mean that a wider range of companies can access long-term funding at an appropriate cost.
The composition of corporate bond issuance indicates that access remains concentrated among a limited number of large issuer groups. In the first nine months of 2025, credit institutions accounted for 70.4% of the value of privately placed corporate bonds, while real-estate companies represented 21.5%. All other sectors combined accounted for only 8.1%. This suggests that companies in manufacturing, technology, logistics, energy and many service industries have yet to use the bond market on a scale commensurate with their financing requirements.
In EBC's view, market depth should therefore be assessed using a broader range of indicators than capitalisation or trading value alone. Relevant measures include the number of companies capable of issuing publicly offered shares and bonds, the diversity of issuers, the average maturity of funding, the quality of disclosure and the proportion of capital raised for new investment.
The plan's emphasis on investment funds, pension funds, insurance companies and financially capable institutional investors represents a structurally important policy direction. These institutions are generally able to hold assets for longer periods, conduct more extensive due diligence and provide a more stable source of demand for equities, bonds and other long-duration financial instruments.
Retail investors will continue to play an important role in broadening market participation and supporting liquidity. However, a market that depends too heavily on retail flows may be more sensitive to shifts in sentiment and short-term cycles. Increasing the share of institutional investors could support a more balanced market, but this will only be effective if it is accompanied by high-quality investable products and appropriate governance mechanisms.
Vietnam already possesses substantial pools of institutional savings. By the end of 2025, total assets in the insurance market had exceeded VND 1.11 quadrillion, of which nearly VND 959 trillion had been reinvested into the economy. This provides an important foundation for the formation of long-term capital, particularly where investment portfolios are diversified prudently and managed in accordance with insurers' obligations to policyholders.
The legal framework for supplementary retirement insurance introduced in 2026 also permits qualifying funds to invest in listed securities, while reducing the minimum allocation to government bonds to 40% of total net asset value. This expands the scope for pension fund asset allocation, although it is accompanied by investment limits and risk-management requirements intended to protect participants.
According to EBC, developing institutional investors should not be understood simply as increasing the total assets managed by funds. The market must also create a sufficient range of high-quality instruments through which long-term capital can be allocated effectively.
Infrastructure bonds, green bonds, ESG funds, funds investing in innovative companies and transparent fixed-income instruments could help connect household and institutional savings with long-term development priorities. The reform plan also encourages the development of funds supporting long-term investment in infrastructure, innovative start-ups and green and sustainable programmes and projects.
A larger financial market does not necessarily generate stronger economic growth if most capital merely circulates among existing assets without supporting the creation of new productive capacity. Rising asset prices and higher liquidity may improve market sentiment, but their impact on the real economy materialises only when businesses can raise new resources to invest, upgrade technology and expand productive activities.
The progress of financial reform should therefore not be assessed solely through market capitalisation, account numbers or trading value. Indicators reflecting the quality of capital allocation—including the share of funding raised through public offerings, average funding maturities, issuer diversity and the amount of capital channelled into infrastructure, technology, the energy transition and higher-value-added production—will be more consequential for long-term growth.
The development of green capital markets must also extend beyond the introduction of new product labels. Green bonds, green equities and ESG funds can only fulfil their intended role when proceeds are linked to clearly defined uses, measurable outcomes and disclosure frameworks that allow investors to assess both financial risk and real-world impact. The plan outlines the development of green equities, green corporate bonds, specialised ESG funds and green indices aligned more closely with international standards.
"Reform will have truly succeeded when long-term savings within the economy can be transformed into long-term investment capital for national priorities without placing the entire burden on the banking system's balance sheet. At that point, the capital market will no longer function only as a venue for trading financial assets. It will become part of the country's growth infrastructure,." - Rehman concluded.
The approval of the Master Plan for Comprehensive Reform of Vietnam's Financial Market demonstrates that Vietnam is moving beyond the development of individual market segments towards the construction of a more integrated financial architecture. If this transition is implemented successfully, financial reform could become one of the key foundations supporting sustained high growth, stronger productivity and Vietnam's progress towards becoming a high-income economy by 2045.
