Vietnam’s roughly VND 2 quadrillion gap between bank lending and deposits is not only a banking issue. It changes the economics of corporate finance. When bank funding becomes more expensive while credit must continue to support growth, banks have less room for weak risk-adjusted returns. Lower-margin, less differentiated SMEs are likely to feel that pressure first through pricing, collateral requirements, tighter limits or more selective approval.
This Executive Insight asks the question from the perspective of an owner, CEO and banker: what must companies do before financing becomes the constraint? The answer is not a collection of small cost initiatives. It is one coordinated programme covering cash, operating performance, transformation, portfolio and value-chain choices, M&A and carefully quantified international expansion.
If you work with a Vietnamese owner-led or mid-sized company, forward this article to the person responsible for cash, capital allocation and strategy. The time to act is before the next financing decision.
