Structural Adjustment

DEFINITION of 'Structural Adjustment'

A type of credit facility that helps developing countries become more economically self-sufficient. Structural adjustments are intended to reduce the current account debt of a debtor nation, as opposed to financing a new project. They do this by allowing the debtor nation to reschedule principal payments to a later date.

BREAKING DOWN 'Structural Adjustment'

Structural adjustments were first introduced by the World Bank in 1979. They usually take the form of multi year agreements, in which the borrower promises to instigate domestic economic growth through increased exports and economic diversity. Therefore, the borrowing country will be better able to make the payments later, when its economy is stronger.

RELATED TERMS
  1. Debtor Nation

    A nation with a cumulative balance of payments deficit. A debtor ...
  2. Debtor

    A company or individual who owes money. If the debt is in the ...
  3. Debt Rescheduling

    A practice that involves restructuring the terms of an existing ...
  4. Collection-Proof

    A debtor who doesn’t have any assets that a creditor can collect ...
  5. Debt Fatigue

    When a debtor stops making payments on his or her debts and starts ...
  6. Reaffirmation

    An agreement made between a debtor and a creditor to repay some ...
Related Articles
  1. Markets

    What's a Debtor?

    A debtor​ is an individual or company that owes money.
  2. Markets

    What is the Paris Club?

    The Paris Club is an informal group of nations that meet to find solutions for problems facing debtor nations.
  3. Markets

    How Countries Deal With Debt

    For many emerging economies, issuing sovereign debt is the only way to raise funds, but things can go sour quickly.
  4. Investing

    Understanding Bad Debt

    Bad debt is money a company or lender is owed, but is unable to collect.
  5. Retirement

    What The National Debt Means To You

    The U.S. deficit seems to grow every year. But how does it actually affect you?
  6. Financial Advisor

    4 Structured Product Types Wealthy Clients Love

    High-net-worth investors find structured products appealing for a variety of reasons. Here's a look at four types.
  7. Markets

    How Can Inflation Be Good For The Economy?

    Inflation is usually thought of as a dirty word, but it does have its benefits.
  8. Markets

    How Does National Income Accounting Work?

    National income accounting is an economic term describing the system used by a country to gather data and determine aggregate economic activity.
  9. Investing

    Changing The Face Of Bankruptcy

    A 2005 law attempts to unmask fraudulent debtors and still save those who are struggling. Will it affect you?
  10. Managing Wealth

    How To Reduce Your Debts Without Spending Unnecessarily

    While it is not possible to repay your debts without investing money into the process, you should avoid spending unnecessary sums of cash in the pursuit of a financially liberated future.
RELATED FAQS
  1. Are debt collectors allowed to call me at work?

    Find out if and when it is all right for a debt collector to call a debtor at work and how the debtor can make it stop under ... Read Answer >>
  2. How do debt collection agencies make money?

    Find out how a collection agency makes money, what rules it is bound by, and when it can take a pay check or garnish a bank ... Read Answer >>
  3. What effect did the Bankruptcy Abuse Prevention and Consumer Protection Act of 2 ...

    Credit card companies and banks hate deadbeats who take from their bottom lines. They especially dislike the Chapter 7 bankruptcy ... Read Answer >>
  4. Can a creditor sue me for a delinquent account?

    Learn what happens when an account is delinquent and read about the regulations that protect consumers who have delinquent ... Read Answer >>
  5. How can I use quantitative analysis to evaluate investment decisions if I don't have ...

    Discover whether companies that advertise debt consolidation services are legitimate. Some may take advantage of people who ... Read Answer >>
  6. How does a company's capitalization structure affect its profitability?

    Learn about capitalization structure and how the combination of debt and equity a company uses to fund operations can affect ... Read Answer >>
Hot Definitions
  1. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  2. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  3. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  4. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
  5. After-Hours Trading - AHT

    Trading after regular trading hours on the major exchanges. The increasing popularity of electronic communication networks ...
  6. Omnibus Account

    An account between two futures merchants (brokers). It involves the transaction of individual accounts which are combined ...
Trading Center