What does concessional mean?
"Concessional" is an adjective describing something granted as a concession, most commonly used for terms, rates, or prices that are more favourable than the standard ones. Its strongest association is with development finance: a "concessional loan", for instance, is lent at an interest rate well below the market level, often by institutions such as the World Bank or IMF to support poorer countries. The word also appears in other official settings, as in "concessional fares" for students or pensioners on public transport. Formal in register, it rarely surfaces in casual conversation, where simpler words like "discounted" or "reduced" take its place. The term derives from "concession", which ultimately traces back to the Latin verb concedere, "to yield or grant". Because it implies deliberate generosity rather than mere cheapness, "concessional" carries a subtly positive connotation: it signals that better-than-normal treatment has been intentionally extended, usually for humanitarian, developmental, or promotional reasons.
adjectiveRelating to or involving a concession; especially used of rates, terms, or prices that are granted more favorably than usual, typically for charitable, developmental, or promotional reasons.
- Describing terms, rates, or prices granted more favourably than standard, especially in finance and aid (as in concessional loans or concessional financing).
- More generally, relating to or involving a concession of any kind.
"The development bank offered a concessional loan at well below the market interest rate."
"The IMF extended concessional credit to the country on highly generous repayment terms."
"Students and seniors travel at a concessional fare on the railway network."
When the World Bank lends money at rates banks would never offer you, it calls that a "concessional loan" — charity, dressed in financial vocabulary.
Reviewed by Deb Chak, Editor. AI-assisted content curated by RJS Tech Solutions LLP.
Etymology of concessional
"Concessional" is formed from "concession" combined with the adjective suffix -al. "Concession" entered English from Latin concessio, derived from concedere, meaning "to yield, grant, or give way", formed from com- (together) and cedere (to go, yield). The word shares this root with relatives such as "concede", "concessionaire", "recede", and "precede". The specific financial sense attached to concessional lending developed in twentieth-century economic and diplomatic usage.
Related word forms
How concessional is actually used
Predominantly formal, appearing most often in economics, development finance, and official policy contexts such as World Bank and IMF documents. In everyday speech, speakers usually say "discounted" or "reduced" instead. The word carries a positive connotation of generosity or special treatment rather than loss or defeat.
Easily confused with concessional
"Concessive" describes something that concedes a point, especially in grammar or argumentation (a concessive clause), while "concessional" describes favourable terms, rates, or conditions granted as a concession.
"Concessionary" often refers to a person or company holding a concession (or to discounted fares for groups like seniors), whereas "concessional" more broadly characterizes terms or financing that involve a concession.