fb88 – A Strategic Partner of S&P Global and the Credit Guarantee & Investment Facility (CGIF) have released a new commentary from the Vietnam Debt Capital Market Forum 2025, co-hosted by the two institutions, offering critical insights into the future of Vietnam’s debt capital market. 

Against the backdrop of rising capital demand for infrastructure, real estate, and capital-intensive industries, the forum highlighted major “bottlenecks,” unveiled new opportunities, and proposed essential reforms for the debt capital market to become a sustainable growth driver.

Key highlights:
🔹Capital Bottleneck: Vietnam's growth ambition is strained by its over-reliance on banking credit, a channel insufficient for the massive capital required for infrastructure, real estate, and capital-intensive industries through 2030. This creates a significant bottleneck for the private sector, which faces a high cost of funds and a precarious capital structure dominated by short-term debt. This mismatch makes financing essential long-term mega-projects unfeasible, effectively crowding out the country's investment demand.

🔹 Imperative for Structural Reform: A strong consensus emerged on the urgent need for a comprehensive reform of the capital market's infrastructure. The primary goal is to develop the corporate bond and equity markets into efficient, low-cost capital channels that operate in parallel to the banking system.

🔹Unlocking Domestic Capital through the Fund Management Industry: Vietnam’s fund management industry manages only USD28 billion by 30 June 2025 (less than 6% of GDP) but is promising for growth as Vietnamese government is working on specific measures for developing institutional investor base for securities and capital markets.

🔹A Shift to Risk-based Capital and Transparency: The market requires a fundamental shift from a collateral-based financing model to one built on trust. To successfully attract capital, issuers must proactively build credibility through strong governance and high-quality financial reporting, moving beyond a reliance on physical collateral.

🔹 Role of Credit Guarantees in Mobilizing Domestic Capital: Private sector enterprises need support in accessing the debt capital market. As they build on credibility and transparency especially for tapping the debt capital market, one sufficient support is credit guarantees. Through the support of reputable credit guarantors with a strong track record in the domestic market such as the Credit Guarantee and Investment Facility, private enterprises across different sectors will be able to rebalance their dependence on bank loans for financing as they shift towards the debt capital market for long-term financing requirements.

🔹International Capital - Hurdles & Opportunities: Attracting foreign debt capital faces a significant hurdle due to Vietnam's low sovereign credit rating of BB+. However, green finance presents a major opportunity, as Vietnam's new comprehensive Green Taxonomy positions it to attract a new class of global investors.

Read the detailed commentary below, consolidated from the forum discussions with in-depth analysis shared by experts from fb88andCGIF.

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