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Portfolio at risk

Portfolio at risk is a portfolio quality indicator that measure the risk to loan portfolio. It considers all loans that have installment in arrears as being at risk of non payment. It is measured by the Value of outstanding loan balance with payments past due at the end of a period e.g. "30" days divided by the Value of outstanding loans at the end of that period. The logic of this indicator is that "If one installment has not been paid chances are that the remaining (Outstanding) loan balance may as well not be paid"

How to view the Portfolio at risk report

To to view the Portfolio at risk report go to Loans/Portfolio Reports/Analysis Reports/Portfolio at risk report and a screen like one below appears.

• Portfolio as at:  Enter the date up to which you want the portfolio at risk report to be generated e.g. "01/06/2020" in the screen above.
• Include Loans with dues on reporting date:  When this option is selected, the portfolio at risk report will show only those loans that have not been paid up to the reporting date. In the example above, the reporting date is "01/06/2020" therefore the portfolio at risk report will show all those loans that have not been repaid until this date.
• Include all active Loans (not only arrears):  When this option is selected, the portfolio at risk report will show all those loans that have outstanding balances for repayment(i.e. those with arrears as per the reporting date and those that were paid on time).
• Set analysis periods:  When you click on this option, a pop up screen will appear from which to set the classes of days to be considered in the portfolio at risk report (i.e. classifying outstanding amounts of loans by days in arrears). The pop up screen looks as follows;

The Portfolio at risk report can be generated with one or a combination of the following additional specifications

• Exclude loans with only interest commission and penalty in arrears: When this option is selected then the Portfolio At Risk (PAR) report will not include loans that have only interest commission and penalties that are in arrears.
• Exclude loans in arrears past maturity: When this option is selected then the Portfolio At Risk (PAR) report will not include loans that are inn arrears but the loan periods have expired
• Show only loans with interest in arrears: When this option is selected the Portfolio At Risk (PAR) report will exclude all loans in arrears except those with interest is in arrears
• Present portfolio at Risk according to cumulative classes: When this option is selected the Portfolio At Risk (PAR) report will show the loan amounts in arrears in every portfolio class up to the portfolio class equal to the number of days the loan is in arrears other than one single amount in arrears on the portfolio class that the loans are in arrears as seen below:

As opposed to the one below:

• Include loans with interest in arrears: When this option is selected the Portfolio At Risk (PAR) report will exclude all loans in arrears except those with interest
• Include principal outstanding for balloon type loans if three installments have interest: Balloon payments are usually paid at the end of the loan period in one lump sum. However loan clients may be asked to be paying interest during the grace period i.e. the months preceding the final payment. When this option is selected then the Portfolio At Risk (PAR) report include the Principal out standing if there are three months with interest.

Note Other than other classes, class 1 in days can not be edited

• Branch Code: Select a branch for which you want to generate a report. In the example above, we have checked "For all" option to have a Portfolio at risk report for all branches.
• Credit Officer:  Select from the drop down box a particular credit officer whom you want to generate a report about, this may be to see the Portfolio at risk report of clients who were handled by that officer selected. In the example, the "For all" option is checked.
• Loan Fund: From the drop down box, select a particular Loan Fund that you want to generate a Portfolio at risk report about, i.e. outstanding loan amounts of money that was issued to clients from a particular loan fund. The Loan Fund is set at Menu System/Configuration/Funds. In the example, the "For all" option is checked.
• Geographical Area: From the drop down box, you can select to generate a Portfolio at risk report basing on the actual locations of the clients. For example Districts, County, Sub-County and Parish as specified in your settings under Menu Support Files/Geographical Area's. In the example in the first screen of this page, the "For all" option is selected in order to have a Portfolio at risk report for clients from all geographical areas.
• Loan Product: From the drop down box, select a loan Product that you want to generate a report about. The Loan product depends on what was set at Menu System/Configuration/Products. You may have Loan Products like School Fees Loans, Agricultural Loans etc. In the example above, the "For all" option is selected in order to have a Portfolio at risk report for all Loan Products.
• Business Sector: From the drop down box, select a business sector for which you want to generate a Portfolio at risk report. This can be Agriculture, Industry, Services or any other depending on what you set at Menu Support files/Business Sector. In the example above, the "For all" option is selected to have a Portfolio at risk report for all business sectors in the selected period.
• Grouping/Order: Select from the drop down box how the portfolio at risk report to be generated will be classified i.e. in the column title/heading. In the first screen on this page, client name is selected.
• Report Format: Select from the drop down box the sequence in which the column titles in the portfolio at risk report will appear.  In the first screen on this page, the first option is selected.
• Client Category 1: From the drop down box, select a classification based on the settings defined at Menu Support Files Client Category 1. In the example, the "For all" option is checked. The same applies for Client Category 2 and client Category 3.
• Loan Category 1: From the drop down box, select a classification of a loan that you made at Menu Support Files/Loan Category 1, it may have been a long term loan, short term loan etc. In the example, the "For all" option is checked. The same applies for Loan Category 2 and Loan Category 3.
• Guarantee Items: Select a class of items that were used as security for loans from the drop down box. These are set at Menu Support Files/ Loan Guarantee Items.

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