Portfolio at risk over 30 days (PAR30) is the outstanding principal of every loan that has an instalment more than 30 days overdue, divided by the outstanding principal of the whole loan portfolio. It counts the entire remaining principal of each such loan, not only the instalment that was missed, because once a borrower is a month behind the whole loan is at risk. In the sample branch below, LKR 103,500.00 of an LKR 800,000.00 portfolio sits in loans more than 30 days overdue, so PAR30 is 12.94%.
What PAR30 measures, and what it does not
PAR30 is a measure of credit risk in the book today. It answers one question: of the money we have lent and not yet been repaid, how much is owed by borrowers who have fallen more than a month behind?
It is not a loss figure. A loan in PAR30 may still be repaid in full, and many are. It is not the repayment rate, which looks at what was collected against what fell due, and it is not the arrears rate, which divides only the overdue amount by the portfolio. Each of those numbers is useful, but neither shows the whole balance that a late borrower still owes. That is why boards and lenders to microfinance institutions tend to ask for PAR first.
The formula
The widely used convention, as set out in the SEEP Network’s microfinance financial reporting framework and used for years by the MIX Market database of microfinance institutions, is:
PAR30 = outstanding principal of all loans with one or more instalments more than 30 days past due ÷ gross outstanding loan portfolio
Three details sit inside that sentence:
- Principal only. Both halves of the ratio use outstanding principal. Accrued interest, penalties and fees are left out of the numerator and the denominator.
- The whole loan. A loan with one instalment 31 days late contributes all of its remaining principal, including instalments that are not yet due.
- Restructured loans count. The same convention adds loans that have been rescheduled or restructured to the numerator, so that a reschedule cannot make a problem loan disappear from the ratio by resetting its days past due.
The denominator is the gross loan portfolio: the outstanding principal of every loan on the books, performing or not, before any provision is deducted. Loans that have been written off are no longer in it.
A worked example in LKR
A fictional branch with ten active loans. The table gives each loan’s outstanding principal, the principal that is overdue, and the number of days since its oldest unpaid instalment fell due.
Sample branch · LKR · as at 30 Sep 2026, 18:00 Asia/Colombo
| Loan | Outstanding principal (LKR) | Overdue principal (LKR) | Days past due | In PAR30 |
|---|---|---|---|---|
KDY-0101 |
120,000.00 | 0.00 | 0 | No |
KDY-0102 |
85,500.00 | 0.00 | 0 | No |
KDY-0103 |
64,250.00 | 4,850.00 | 5 | No |
KDY-0104 |
200,000.00 | 0.00 | 0 | No |
KDY-0105 |
42,800.00 | 9,720.00 | 31 | Yes |
KDY-0106 |
98,000.00 | 0.00 | 0 | No |
KDY-0107 |
23,400.00 | 11,240.00 | 62 | Yes |
KDY-0108 |
110,750.00 | 6,300.00 | 18 | No |
KDY-0109 |
37,300.00 | 15,900.00 | 95 | Yes |
KDY-0110 |
18,000.00 | 5,275.00 | 30 | No |
| Total | 800,000.00 | 53,285.00 |
Step 1: the denominator. Add the outstanding principal of all ten loans: LKR 800,000.00.
Step 2: the numerator. Pick out the loans more than 30 days past due. That is KDY-0105 at 31 days, KDY-0107 at 62 days and KDY-0109 at 95 days. KDY-0110 is exactly 30 days past due, which is not more than 30, so it stays out. Add their outstanding principal:
LKR 42,800.00 + LKR 23,400.00 + LKR 37,300.00 = LKR 103,500.00
Step 3: divide. LKR 103,500.00 ÷ LKR 800,000.00 = 0.129375, which is 12.94% to two decimal places.
PAR1, PAR60 and PAR90 from the same table
The same method at other thresholds gives the ageing profile of the book. Each line keeps the same denominator, LKR 800,000.00.
| Measure | Loans counted | Principal at risk (LKR) | Ratio |
|---|---|---|---|
| PAR1 | 0103, 0105, 0107, 0108, 0109, 0110 | 296,500.00 | 37.06% |
| PAR30 | 0105, 0107, 0109 | 103,500.00 | 12.94% |
| PAR60 | 0107, 0109 | 60,700.00 | 7.59% |
| PAR90 | 0109 | 37,300.00 | 4.66% |
Read together, the four lines say more than any one of them. A PAR1 of 37.06% against a PAR30 of 12.94% means most of the late principal in this branch is only days or weeks late. Whether those loans cure or roll into the next bucket is the question for the next collection meeting.
Why the arrears rate gives a smaller number
Divide only the overdue principal by the portfolio and you get the arrears rate: LKR 53,285.00 ÷ LKR 800,000.00 = 6.66%. It is about half of PAR30 in this example, and it is the figure a branch under pressure will prefer to report.
The difference is the point of PAR. When KDY-0109 is 95 days behind, the LKR 15,900.00 it has missed is not the only money in doubt. The LKR 21,400.00 that is not yet due is owed by the same borrower, and the chance of collecting it has fallen just as far.
Four choices that move the figure
Two institutions with identical books can publish different PAR30 figures. The difference usually comes from one of these choices, so state each one in the board paper beside the number.
1. The boundary. “More than 30 days” means 31 days or more. Some systems count from the 30th day. In the example, counting KDY-0110 at exactly 30 days raises the numerator to LKR 121,500.00 and PAR30 to 15.19%. Neither is wrong, but a series that changes boundary halfway through is.
2. How days past due are counted. The usual rule counts from the due date of the oldest instalment not fully paid. A borrower who pays part of each instalment can stay current on paper under a rule that only looks at the latest instalment, and fall more than 30 days behind under the oldest-instalment rule. The second is the one that shows risk.
3. Restructured loans. If a rescheduled loan returns to zero days past due and leaves the numerator, rescheduling becomes a way to lower PAR. The SEEP convention keeps restructured loans in the numerator for that reason. At the least, report them on their own line.
4. Write-offs. A write-off removes a loan from both halves of the ratio. If KDY-0109 were written off today, PAR30 would become LKR 66,200.00 ÷ LKR 762,700.00 = 8.68%, down from 12.94%, without a rupee being collected. Always read PAR30 beside the write-offs for the same period.
Adding up branches: never average the percentages
Suppose a second branch has LKR 200,000.00 outstanding, of which LKR 4,000.00 is more than 30 days overdue: a PAR30 of 2.00%. The simple average of the two branches is (12.94% + 2.00%) ÷ 2 = 7.47%. That figure is wrong.
Add the numerators and the denominators instead: (LKR 103,500.00 + LKR 4,000.00) ÷ (LKR 800,000.00 + LKR 200,000.00) = LKR 107,500.00 ÷ LKR 1,000,000.00 = 10.75%. The larger branch carries more weight because it carries more money. The same rule applies when you roll officers up to a branch, or branches up to a region.
Reading PAR30 well
- Watch the trend, by branch and by officer. A single month’s PAR30 says little. Three months of a rising PAR1 in one officer’s book says a lot, and says it before PAR30 moves.
- Beware growth. If the branch in the example disburses LKR 200,000.00 of new loans in October and none of them is late yet, PAR30 falls to LKR 103,500.00 ÷ LKR 1,000,000.00 = 10.35%. The same three borrowers are still behind. A fast-growing portfolio can hide deterioration for a few months.
- Check the cut-off. PAR is “as at” a date. A report run on the morning of the 1st, before the previous day’s collection sheets are keyed in, will overstate it.
From PAR to provision
PAR ages the book. The provision puts a cost on that ageing. Most lenders define a ladder of day ranges, such as current, 1 to 30, 31 to 60 and so on, and apply a provisioning rate to each loan according to the rung it sits on. The rates come from the institution’s own policy and whatever rules apply to it, so they are not given here. What matters is that the ladder uses the same days-past-due count as PAR, so the two figures describe the same book.
How Fused handles this
In Fused, a loan’s days past due are the business date less the due date of the oldest instalment not fully settled, where settled means its principal, its interest and every charge due at it have been paid. The count is worked out fresh each night rather than typed by anyone.
- The built-in Portfolio at risk report lists every active loan with an unpaid instalment as at the date you choose, with its outstanding principal, the amount overdue and its days past due, grouped by office. It runs as CSV, XLSX or PDF and can be scheduled daily, weekly or monthly. See reporting.
- The arrears list shows PAR 30, 60 and 90 for the filter you apply, always divided by the whole book in the offices you are looking at, rather than by the filtered rows. It counts a loan from its 30th day past due. The built-in report gives each loan’s days past due, so an institution that reports the strict “more than 30” figure can copy the report and set its own cut.
- Each institution defines its own delinquency ladder of day ranges, with a provisioning rate on each rung. The provision is that rate applied to the loan’s outstanding principal, optionally net of eligible collateral. It is computed nightly and, unless the institution turns on automatic posting, posted only when a person names a date. A second run for the same date posts only the difference. See arrears and provisioning.
- Every step of the nightly run is safe to run twice, and a role’s office scope decides which branches a reader sees, so a branch manager’s PAR is their own branch’s.
To see PAR30 worked out on your own book, book a walkthrough.