Noun
The degree by which a loan or trade reduces the lender's or one trading partner's returns in comparison with what they would get at full market rates.
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To further discourage the use of associated financing and tied aid as a low-cost device for trade promotion, the new Guiding Principles raise the minimum level of concessionality which each transaction must attain.
The concessionality of tied aid credits is typically underwritten by development assistance (aid) agency budgets rather than export credit agency budgets.
A mechanism by which a loan or trade agreement results in the lender or one party receiving less than full market value.
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These are what we might call the "light grey" food aid of subsidised exports, export credits and other forms of concessionalities, which apply to a very high proportion of total food exports by food aid donors.