Definition: Provisioning

Category: External debt - IMF

Funds set aside in an entity’s account for potential losses arising from financial claims that are not serviced by the debtor, and/or from claims on the entity arising out of insurance cover and/or guarantees given. In many export credit agencies’ accounts, provisions are divided into general and specific provisions. General provisions apply to the overall business, while specific provisions are on a case-bycase basis. Banks make provisions. http://ec.europa.eu/eurostat/ramon/statmanuals/files/external_debt_guide_2003_EN.pdf#page=255