This paper examines the impact of financial constraints on the development of Vietnamese firms driven by Total Factor Productivity (TFP) growth at the firm level. The effects of financial constraints by FCIf index on TFP growth of 97,860 firms are estimated by applying Dynamic Panel Data model over the period 2012-2017. The results show that there was a negative correlation between FCIf and labor productivity growth and TFP growth in all industries. While FCIf index is increased by 0.1, TFP growth of firms is reduced by 3.71%. The results also show that there was an inverse relationship between FCIf index, and the size of value added and assets of firms. Firms operating in manufacturing, wholesale and retail trade, and private firms face the biggest financial constraints.