What do you know about Portfolio at Risk (PAR), and what strategies can you implement to reduce it?

Question

Accepted Answer

Portfolio at Risk (PAR) measures the risk of loan defaults in a financial portfolio, crucial for managing credit risk effectively.

Regularly monitor PAR to identify trends and potential issues early.
Implement robust credit assessment processes to evaluate borrower risk accurately.
Diversify the loan portfolio across different sectors to mitigate risk concentration.
Provide financial literacy training to borrowers to improve repayment rates.
Establish a proactive collections strategy to address overdue accounts promptly.