LOANS ISSUED

9 Months Ended

Dec. 31, 2022

Loans and Leases Receivable Disclosure [Abstract]

LOANS ISSUED

LOANS ISSUED

Loans issued as of December 31, 2022, consisted of the following:

	Amount Outstanding		Due Dates	Average Interest Rate	Fair Value of Collateral	Loan Currency
Mortgage loans	$	493,993	January, 2023 - December, 2047	8.70%	$496,452	KZT
Uncollateralized Bank customer loans	91,149		January, 2023 - December, 2042	16.53%	—	KZT
Collateralized Bank customer loans	12,852		January, 2023 - December, 2025	1.91%	12,796	KZT/RUB
Car loans	34,660		January, 2023 - December, 2029	27.25%	37,211	KZT
Subordinated loans	5,000		December, 2025	3.00%	—	USD
Loans issued to policyholders	1,426		March, 2023 - December, 2023	14.97%	1,697	KZT
Other	297		March, 2023 - August, 2027	2.71%	—	EUR/KZT
Total loans issued	$	639,377

Freedom Bank KZ provides mortgage loans to borrowers on behalf of the JSC Kazakhstan Sustainability Fund ("Program Operator") related to the state mortgage program "7-20-25" and transfers the rights of claim on the loans to the Program Operator. Under this program, borrowers can receive a mortgage at an interest rate of 7%, for 20 years. In accordance with the program and trust management agreement, Freedom Bank KZ carries out trust management of transferred mortgage loans, and transfers all repayments of principal amounts of mortgages plus 3% of the 7% interest to the Program Operator. The remaining 4% of the 7% interest is retained by Freedom Bank KZ as profit margin. Under the program and trust management agreement, Freedom Bank KZ is required to repurchase the rights of claims on transferred mortgage loans, when the loan principal amount and interest payments are overdue 90 days or more. The repurchase of delinquent loans is performed at the loan nominal value.

Since the Freedom Bank KZ sells those loans with recourse for uncollectible amounts, retains part of interest from those loans, and agrees to service those loans after the sale, Freedom Bank KZ has determined that it retains control over the mortgage loans transferred and continues recognizing the loans. As Freedom Bank KZ continues to recognize the loans, it

also recognizes the associated liability in the amount of $319,694 as of December 31, 2022, which is presented separately as liability arising from continuing involvement in the Condensed Consolidated Balance Sheets. As of March 31, 2022 the corresponding liability amounted to $6,447.

As of December 31, 2022 and March 31,2022, mortgage loans include the state mortgage program "7-20-25" with a principal amount of $436,132 and $21,310, respectively.

Total loans issued as of December 31, 2022, includes uncollateralized bank customer loans purchased from a related party, microfinance organization Freedom Finance Credit (“FFIN Credit”), a start-up created and controlled by the Company's controlling shareholder, chairman and chief executive officer, Timur Turlov. FFIN Credit is a non-bank credit institution that issues loans in Kazakhstan under simplified lending procedures. FFIN Credit was created as a pilot project to test and improve the scoring models used for qualifying and issuing loans. The principal operation of FFIN Credit is to provide loans to customers online using biometric identification and its proprietary scoring process. After completion of the pilot launch, it is anticipated that the ownership of FFIN Credit will be sold by Mr. Turlov to the Company.

The agreements entered into by the Company with FFIN Credit to purchase uncollateralized bank customer loans provide the Company the ability to sell back to FFIN Credit up to $58,359 of the total loans purchased. The Company has determined that it has received control over the loans purchased from FFIN Credit, and accordingly the Company has recognized such loans on its Condensed Consolidated Balance Sheets.    

During the three and nine months ended December 31, 2022, the Company purchased loans in the aggregate amount of $50,594 and $89,935 and sold back loans totaling $12,977 and $32,904, respectively, to FFIN Credit, a company outside of the Company's group which is owned by Timur Turlov. During the three and nine months ended December 31, 2021, the Company purchased loans in the aggregate amount of $9,546 and $29,020 and sold back loans totaling $3,968 and $6,828 to FFIN Credit, respectively. As of December 31, 2022, the Company held outstanding loans purchased from FFIN Credit totaling $100,433, net of an allowance of $7,511.

Loans issued as of March 31, 2022, consisted of the following:

	Amount Outstanding		Due Dates	Average Interest Rate		Fair Value of Collateral	Loan Currency
Mortgage loans	$	51,924	April 2022 - March 2047	11.86	%	52,134	KZT
Uncollateralized bank customer loans	34,067		April 2022 - March 2047	17.56	%	—	KZT
Subordinated loan	5,033		December 2022-April 2024	4.89	%	—	USD
Subordinated loan	1,256		December 2022-April 2024	7.00	%	—	UAH
Other	123		February 2022-Febraury 2027	2.50	%	—	USD
Loans to policyholders	43		July 2022 - March 2023	12.02	%	284	KZT
Total loans issued (recasted)	$	92,446