In theory, IMF credit is meant to increase reserves. By building up their holdings of reserves, member countries would be able to self-insure against future crises (Bird and Rowlands, 1280). They will be able to do this because when reserves increase, this will reassure domestic and foreign investors so as to not withdraw their funds and the IMF does exactly this (Dreher and Walter 2010, 2). This seems like a good thing because having investors would help boost the economy but it is very two-faced seeing that having more foreign investors would mean that the country could possibly end up relying on foreigners for capital to spend. This can pose a problem most especially if these investors do not get a return on their investment within a certain amount of time. If this happens, they could withdraw their funds, causing the recipient country's currency to depreciate and stock market to decline within such a short amount of time. .
This would be detrimental because it would lead to an economic shock, with an example being the import industry having a difficult time bringing in foreign goods. Countries must then be able to balance their dependency on investments. They should not rely too much on these investments because if something goes wrong, the crises they will face will just be worse. In addition, "IMF credit is meant to alleviate restructuring the economy, in practice the result might be the exact opposite: Money disbursed increases borrowing governments' leeway, thus reducing incentives to reform (Dreher, 773). Now with money at their disposal, governments can pursue inappropriate policies longer than they would otherwise do (Ibid, 773). Basically, it gives room for governments officials to be corrupt. .
Moreover, "some critics point out that the IMF might give misguided policy advice (such as premature capital account liberation), which might in fact increase the risk of crises"" (Dreher and Walter, 3).