Vietnam should speed up the update of its regulatory sandbox framework for financial technology (fintech) sector as the country has established international financial centers in Ho Chi Minh City and Danang and pursues a double-digit economic growth target.
Experts made the suggestions at “Synchronized solutions for capital market development” conference in Hanoi on Thursday, hosted by The Investor magazine (theinvestor.vn). They elaborated that such ambitious growth targets require significantly more long-term capital than its banking system currently provides.
Nguyen Van Than, chairman of the Vietnam Association of Small and Medium Enterprises (Vinasme), said small businesses currently have no viable funding channel outside traditional bank lending. He called for a sandbox framework that would allow peer-to-peer lending and alternative finance models to operate. He noted that Vietnam should speed up the progress as regional countries have already implemented such frameworks.
Regarding the stock market, Vu Chi Dung, head of the legal and foreign affairs department at the State Securities Commission, said the authorities is drafting changes to the Securities Law. The draft law also incorporates a sandbox mechanism specifically for innovative startups, with a separate government decree on startup innovation currently under development, he added. The goal is to provide a legal pathway for early-stage technology companies to test financial products and services under regulatory supervision before full licensing.
The newly-established international financial centers in Ho Chi Minh City and Danang are the primary locations for testing new financial products and models, said Associate Professor Nguyen Huu Huan from University of Economics Ho Chi Minh City. A regulatory sandbox at both centers has been incorporated into the legal framework through a series of government decrees, he added.
The sandbox framwork would be implemented once the government adopts its operational charter, he added. Licensing in the initial phase will be restricted to established institutions with strong international reputations, he noted.
The Ministry of Finance estimated for Vietnam to achieve its growth targets through 2030, it has to raise investments of VND38,500 trillion ($1.46 trillion) over five years, said Can Van Luc, chief economist at BIDV bank and a member of the National Advisory Council on Financial and Monetary Policy. The figure is more than double the previous five-year period. As credit is equivalent to 146 percent of GDP at end-2025, Vietnam should plan for the development of alternative long-term funding channels.
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