⚠ BETA — all market data shown (deals, filings, prices, indices) is demo / illustrative, not live trading data. For evaluation only; verify before acting.
June 14, 2026
The Dispatch

Definition

Portfolio at Risk (PAR)

Portfolio at Risk is the share of a microfinance or NBFC loan book that is overdue beyond a set number of days, a key asset-quality metric.

PAR is usually quoted as PAR 30, 60 or 90, meaning loans overdue by more than that many days as a percentage of the gross loan portfolio. It is the microfinance sector's equivalent of the bank NPA ratio and an early indicator of stress.

Rising PAR signals deteriorating repayment, often ahead of higher credit cost and write-offs. Because microfinance is collateral-free and concentrated geographically, PAR can spike sharply during local disruptions, making it a closely watched metric for MFI investors.

Related terms

  • Non-Performing Asset (NPA)A Non-Performing Asset is a loan or advance on which the borrower has not paid interest or principal for 90 days or more, as defined by RBI norms.
  • Credit CostCredit cost is the provisioning a bank or NBFC books for bad and doubtful loans during a period, usually expressed as a percentage of average advances.
  • Microfinance Institution (MFI)A Microfinance Institution provides small, collateral-free loans to low-income borrowers, typically women in groups, for income-generating activities.
  • Gross Loan Portfolio (GLP)Gross Loan Portfolio is the total outstanding principal of all loans of a microfinance lender or NBFC, a standard measure of its lending scale.

Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.