Interesting question. The premise by necessity includes the premise that "democracy" is or can be manufactured, bought and sold; and conversely, that the IMF could arbitrarily insert terms in the loan contract which mandated "fascism" be instituted by the "rulers" of the nation state.
The very nature of the simplest definition of "democracy" according to a rudimentary search of the term is
a system of government by the whole population or all the eligible
members of a state, typically through elected representatives.
which would mandate that the people themselves agree to a loan from the IMF, or any other external monopoly capital interests or concerns.
"democracy" is rule by the people themselves. Some would define "representative republic" (e.g., the system implemented by the United States) as a "democracy", though careful reading of the Federalist Papers provides ample evidence that the Founding Fathers of the United States did not intend for the fledgling U.S. to be a "democracy", as they feared mob rule. The Founding Fathers considered themselves "natural elite", the "haves", and the People the "have nots", which must be guarded against in a system based on unequal distribution of wealth.
When you run in debt; you give to another power over your liberty. -Benjamin Franklin
There are two ways to enslave a nation. One is by the sword. The other is by debt. -John Adams
I go on the principle that a Public Debt is a Public curse and in a Republican Government a greater than in any other. -James Madison
To answer your question directly, the IMF could theoretically "encourage countries to Democracy". However, true "democracy" is just that, government by the People, thus, the People would have to agree to be contracted into loans from the IMF in the first place, which is on its face contrary to self-determination and "democratic" self-governance - as the People would become debtors to external creditors - which no sovereign "democratic" People would rationally choose to become except for extraordinary circumstances; for example mass starvation, not due to the idea of "developing".
The People themselves need to "encourage" their own country to "Democracy". Once the "democracy" is formed and stable, then the People can decide whether or not to become debtors to external creditors.
Therefor, becoming indebted to the IMF, or any other external or internal capital interest is contrary to the very core principals of "democracy", and should avoided at all costs to preserve the "democracy" and sovereignty of the nation state, and the People themselves.