Vietnam financing mismatch hits long-term growth

The problem is not hypothetical. In the first half of 2026, medium- and long-term credit rose 11.1%, faster than short-term lending’s 6.9%, marking the fifth straight quarter in which longer-tenor loans outpaced short-term credit, according to S&I Ratings. Yet SSIAM said about 80% of time deposits at banks still mature in under 12 months, underscoring the structural mismatch between the funding banks receive and the loans they extend.

That mismatch is already shaping investment decisions. Agribusiness firms say they need long-term financing to build dryers, silos and processing lines that are essential for export operations. Vietnamese manufacturers say medium- and long-term loans have allowed them to install modern production lines, cut fuel use and double capacity. In one example cited by Viet Thang, factory output rose from 3 million to 6 million pairs of products a year after investment financed by Agribank.

The economic stakes extend well beyond individual companies. Economist Cấn Văn Lực of BIDV said Vietnam will need about 38.5 quadrillion dong of total social investment in 2026-2030 to meet an average growth target of around 10% by 2030, with the private sector at home and abroad expected to contribute roughly 25.5 quadrillion dong. That scale makes it impossible for bank credit alone to carry the burden, especially as banks must still manage liquidity against short-term deposits.

For lenders, the implications cut both ways. More long-term lending can deepen client relationships and support real-sector growth, but it also raises balance-sheet pressure when funding is mostly short term. For investors, the story is a signal that Vietnam’s capital markets still need to do more of the work that banks have been forced to do: equity to absorb risk, corporate bonds to lengthen maturities and institutional capital to finance projects that do not pay back quickly.

That is why officials and business leaders are pressing for a broader funding stack. The State Bank has said banks cannot be the sole source of financing for long-dated infrastructure and industrial projects, while executives argue that Vietnam needs deeper stock, bond, fund and insurance markets to channel savings into production rather than leaving them trapped in deposits. Techcombank Chief Executive Jens Lottner said large projects and infrastructure need more equity financing, including initial public offerings, not just debt.

The bear case is clear: if capital markets remain shallow and bond liquidity stays weak, the banking system will keep carrying maturities it was never built to absorb, constraining credit growth and keeping financing costs elevated. The bull case is that a more diversified funding ecosystem would let Vietnam scale up its industrial base without overloading banks, while rewarding better-governed companies with cheaper, more stable capital.

For investors, the message is that Vietnam’s growth story now depends as much on financial plumbing as on factory output. The winners will be companies with clean balance sheets, transparent governance and project cash flows strong enough to attract long-term capital; the losers will be firms still reliant on rolling short-term bank loans to fund long-duration expansion.