Vietnam is starting its largest infrastructure investment cycle, needing nearly $1.5 trillion over five years. The key question is who will provide the long-term capital to support the country's growth goals.

The State Bank of Vietnam has made several changes to credit rules in just over a month.

These changes include revising loan-to-deposit ratios, using state treasury deposits, and exempting credit limits for social housing and key projects worth $28.7 billion.

All these measures aim to increase the banking system's ability to supply capital as Vietnam seeks double-digit economic growth.

Achieving such growth requires enormous investment. Total social investment from 2026-2030 needs to reach 38-39% of GDP, or $250-260 billion annually.

In the long term, growth must rely more on productivity, science, technology, and innovation.

However, this transition cannot happen overnight. Total factor productivity currently contributes about 44-46% of economic growth.

This means investment capital will remain crucial for growth in the medium term.

The question is where this capital will come from.

Unlike many advanced economies, Vietnam relies mostly on bank credit for medium- and long-term financing.

The banking system supplies around 50-57% of total funding, while the stock market contributes only 10-18% and the corporate bond market accounts for just 3-6%.

Commercial banks perform multiple roles, providing working capital and financing medium- and long-term investments.

With the corporate bond market recovering slowly and public investment disbursement falling short, pressure has increased on the banking sector.

This explains why the State Bank of Vietnam continues to expand monetary policy flexibility.

Yet, this raises another question: if banks carry most of the financing burden, how much longer can monetary policy expand its role?

The answer lies in the size of Vietnam's credit system.

Outstanding credit reached approximately $765.5 billion by June 2026, increasing by around $55 billion in six months.

Total deposits stood at $663.6 billion, leaving a funding gap of roughly $102 billion between deposits and outstanding loans.

The central bank has chosen not to pursue broad-based monetary easing, instead expanding banks' operating capacity by adjusting regulations.

Revisions to loan-to-deposit ratios and exemptions from credit growth limits serve the objective of keeping credit flowing while preserving financial stability.

Given current conditions, this approach appears well-suited to the economy's challenges.

However, these decisions reveal a broader reality: Vietnam's banking system has assumed responsibilities beyond its traditional role.

An economy that depends excessively on bank credit sees outstanding loans expand rapidly, bringing leverage closer to risk thresholds.

By the end of 2025, total outstanding credit had reached around $703 billion, roughly six times higher than in 2012.

Comparisons across Southeast Asia highlight the contrast, with Indonesia and the Philippines maintaining lower credit-to-GDP ratios.

Each time Vietnam seeks to accelerate growth, the task of mobilizing capital falls primarily on commercial banks.

After years of development, Vietnam has yet to build a capital market deep enough to share the financing burden with the banking sector.

To sustain high growth, Vietnam needs not only flexible monetary policy but also a stronger corporate bond market and upgraded stock market.

Only then can monetary policy return to its fundamental role: safeguarding macroeconomic stability and maintaining the financial system's resilience.

Tu Giang