![]() ![]() However, we may also use PAR 60 days or PAR 90 days to have a better picture of the quality of loans we have. To make it easy in analysis, portfolio at risk is usually measured by using PAR 30 days, in which “30” refers to the loan portfolio that is overdue 30 days or more. The term risk in this ratio refers to the risk that the loan’s clients may not pay or not be able to pay back the loans that we provided them. In the portfolio at risk analysis, we mainly use PAR to measure how much risk that our loan portfolio has in percentage compared to our total portfolio. The excel calculation of portfolio at risk as well as the form and data in the picture of portfolio at risk example above can be found in the link here: Portfolio at risk calculation excel Portfolio at Risk Analysis With the information in the portfolio at risk example above, we can calculate PAR 30, PAR 60 and PAR 90 as below: ![]() which is a microfinance institution has USD 9,013,400 of the total amount of loan portfolio and a detailed loan by overdue days as in the table below.Ĭalculate PAR 30 days, PAR 60 days and PAR 90 days for the above loan portfolio. ![]() Portfolio at Risk Exampleįor example, ABC Ltd. In this case, we need to change the above formula from 30 days to 60 days or 90 days. ***We may also need to calculate PAR 60 days or 90 days. In this case, we need to change our formula from “loan portfolio” to “loan client”. Sometimes, we may need to calculate PAR 30 using clients in the portfolio at risk formula. 30 days, to divide with the total loan portfolio. We can calculate portfolio at risk or PAR with the formula of using the amount of loan portfolio that is overdue from a certain period onward, e.g. However, sometimes, the number of loan client is also used to calculate this ratio. Portfolio at risk is usually calculated by using the amount of loan outstanding that is overdue comparing to total loan. PAR is important when we need to analyze or measure the risk in percentage that our loans may go default if we properly breakdown the loans and group them in similar risk categories. Portfolio at risk or PAR is the type of ratio that usually is used in microfinance institutions or banks to measure the quality of loans and the risk that they currently have. ![]()
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