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Definition of undercapitalized. : having too little capital for efficient operation an undercapitalized business.
InvestorWords.com-Online Investing Glossary. An underdeveloped economy in which communities use primitive tools and methods to harvest and hunt for food, often resulting in little economic growth. Traditional economies are often found in rural regions with high levels of subsistence farming. Countries that evolve their economies past the traditional level often develop into market economies or command economies.