Loan loss provisioning
Provisioning runs: arrears buckets, provision rates and posting the provision.
A provisioning run takes a snapshot of every active loan, places it in a bucket by days past due, and applies a provision rate to its outstanding principal.
| Bucket (days past due) | Provision rate |
|---|---|
| Current (0) | 1% |
| 1–30 | 5% |
| 31–90 | 25% |
| 91–180 | 50% |
| Over 180 | 100% |
Important
These are illustrative expected-credit-loss rates built into Zung, not your accounting policy. Your regulator or auditor may require different classes and rates — confirm them before relying on the run.
- Open and click Run at month end.
- Open the run to see totals and loans by bucket.
- Compare the required provision with the balance of your loan loss reserve.
- Post the difference with a journal entry (debit provision expense, credit loan loss reserve).
Past runs are kept, so you can compare month on month. See also loan loss provision in the glossary.
Something unclear or out of date? Tell us and we'll fix it.