XML 36 R15.htm IDEA: XBRL DOCUMENT v3.25.2
LOANS ISSUED
 3 Months Ended
Jun. 30, 2025
Loans and Leases Receivable Disclosure [Abstract]  
LOANS ISSUED LOANS ISSUED
Loans issued as of June 30, 2025, consisted of the following:
Amount OutstandingDue DatesAverage Interest Rate Fair Value of
Collateral		Loan Currency
 
Mortgage loans$963,868 July 2025 - May 205111.8%$963,785 KZT
Uncollateralized bank customer loans258,661  July 2025 - June 2045 29.0%— KZT
Right of claim for purchased retail loans226,357  July 2025 - May 2031 15.0%226,357 KZT
Collateralized bank customer loans223,697  July 2025 - June 2045 17.6%209,654 KZT
Car loans147,058  July 2025 - June 2032 24.3%145,557 KZT
Other10,934  July 2025 - May 2030
3.0%/18.0%/ 18.3%
— 
 USD /KZT/ EUR
Allowance for loans issued(81,173)
Total loans issued$1,749,402 
The Group 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 mortgage loans to the Program Operator. The proceeds received from these transfers are presented within funds received under state program for financing of mortgage loans in the Condensed Consolidated Statements of Cash Flows. Under this program, borrowers can receive a mortgage at an interest rate of 7% subject to not less than 20% down payment, for 25 years, and the interest payments received by the Group are recognized as interest income in the Group's Condensed Consolidated Statements of Operations and Statements of Other Comprehensive Income. In accordance with the program and trust management agreement for the program, Group services the transferred loans and remits all repayments of principal it receives plus 4.5% of the 7% interest received to the Program Operator. The interest paid to the Program Operator is recognized as interest expense in the Condensed Consolidated Statements of Operations and Statements of Other Comprehensive Income. The remaining 2.5% of the 7% interest is retained by Group. Under the program and trust management agreement, Group is required to repurchase the rights to make claims on the transferred loans when either loan principal repayments or interest payments are overdue 90 days or more. The repurchase of overdue loans is performed at the loans' nominal value and is presented within repurchase of mortgage loans under the State Program in the Condensed Consolidated Statements of Cash Flows.

Since the Group transfers the rights to make claims on the loans with recourse for loans that are more than 90 days past due, retains part of the interest received on the loans and agrees to service the loans after the sale of the loans to the Program Operator, the Group has determined that it retains control over the loans transferred and continues recognizing the loans, which are accounted for as secured borrowings of the Group in accordance with ASC 860, Transfers and Servicing. As the Group continues to recognize the loans as assets, it also recognizes the associated liability equal to the proceeds received from the Program Operator, which is presented separately as liability arising from continuing involvement in the Consolidated Balance Sheets. This liability accrues 5% interest annually as described above. As of June 30, 2025 and March 31, 2025, the corresponding liability amounted to $496,414 and $503,705, respectively.
As of June 30, 2025 and March 31, 2025, mortgage loans include loans under the state mortgage program "7-20-25" with an aggregate principal amount of $505,303 and $511,851, respectively, were presented within loans issued in the Condensed Consolidated Balance Sheets.

The Group has an agreement with Microfinance Organization Freedom Finance Credit LLP ("FFIN Credit"), a company established and controlled by FRHC's controlling shareholder, chairman and chief executive officer, Timur Turlov, to purchase uncollateralized retail loans. 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. Following the successful pilot, the Company intends to either acquire FFIN Credit from Mr. Turlov or implement an in-house solution to replicate its functions, ensuring continuity and scalability of the lending operations. The bank has legal ownership over purchase from FFIN Credit uncollateralized retail loans, however, in accordance with U.S. GAAP requirements, the Group does not recognize those loans, since effective control over the transferred loans are maintained by FFIN Credit. Instead, the Group recognizes the loans receivable from FFIN Credit presented on the Condensed Consolidated Balance Sheets within the loans issued. As of June 30, 2025 and March 31, 2025, right of claims for purchased retail loans amounted to $226,357 and $183,635, respectively.

The total accrued interest for loans issued amounted to $15,275 as of June 30, 2025 and $13,385 as of March 31, 2025.
Loans issued as of March 31, 2025, consisted of the following:
Amount OutstandingDue DatesAverage Interest Rate Fair Value of
Collateral		Loan Currency
 
Mortgage loans$924,530 April 2025 - March 205011.4%$924,386 KZT
Uncollateralized bank customer loans249,448 April 2025 - March 204528.1%— KZT
Right of claim for purchased retail loans183,635 April 2025 - March 203015.0%183,635 KZT
Car loans156,340 April 2025 - April 203224.2%155,320 KZT
Collateralized bank customer loans148,759 April 2025 - July 204319.6%128,543 KZT
Other7,838 April 2025 - September 2029
18.0%/12.70%/3.00%
29 
KZT/EUR/USD
Allowance for loans issued(75,115)
Total loans issued$1,595,435 
Credit quality indicators

Freedom Bank KZ uses a loan portfolio quality classification system that indicates signs of a significant increase in credit risk and contractual impairment, depending on the analysis of reasonable and supportable information available at the reporting date. The loan portfolio is classified into "not credit impaired," "with significant increase in credit risk" and "credit impaired" agreements.
Loans "not credit impaired" under the agreement are serviced as usual, there are no primary signs of an increase in credit risk. Agreements classified as "with significant increase in credit risk" represent loans for which there is an increase in the credit risk expected over the life of the agreement compared to the initial risk at the date of recognition of the loan. In practice, the presence of overdue debt on principal and interest for a period of more than 30 days or the absolute probability of default threshold PD exceeds 20%. Agreements classified as "credit impaired" represent loans for which at the reporting date there are signs of impairment, the borrower has been in default for 90 or more days for individuals and 60 or more days for legal entities, the borrower for the last 6 months for individuals and 12 months for legal entities restructured the contract due to the deterioration of the financial condition, the borrower is recognized as credit impaired, the presence of a sign of default, a sign of bankruptcy, the deterioration of the financial performance of the borrower, the presence of other information indicating the presence of a high credit risk.
The table below presents the Group's loan portfolio by credit quality classification and origination year as of June 30, 2025. Current vintage disclosure is the requirement due to first adoption of ASC 326.
Term Loans by Origination Fiscal Year
20262025202420232022PriorRevolving loansTotal
Mortgage loans$90,315 $317,130 $175,752 $352,078 $28,593 $— $— $963,868 
that are not credit impaired90,279 315,205 173,268 349,270 28,149 — — 956,171 
with significant increase in credit risk36 1,587 1,272 1,438 205 — — 4,538 
that are credit impaired— 338 1,212 1,370 239 — — 3,159 
Uncollateralized bank customer loans65,097 69,533 107,347 16,684 — — — 258,661 
that are not credit impaired64,917 65,393 86,494 12,910 — — — 229,714 
with significant increase in credit risk180 1,537 3,993 610 — — — 6,320 
that are credit impaired— 2,603 16,860 3,164 — — — 22,627 
Right of claim for purchased retail loans89,089 114,383 21,808 1,072 5 — — 226,357 
that are not credit impaired89,089 114,383 21,808 1,072 5 — — 226,357 
with significant increase in credit risk— — — — — — — — 
that are credit impaired— — — — — — — — 
Collateralized bank customer loans103,341 114,206 6,065 85 — — — 223,697 
that are not credit impaired103,341 113,606 5,694 85 — — — 222,726 
with significant increase in credit risk— 228 223 — — — — 451 
that are credit impaired— 372 148 — — — — 520 
Car loans12,023 5,188 100,931 28,916 — — — 147,058 
that are not credit impaired12,023 5,173 94,995 21,462 — — — 133,653 
with significant increase in credit risk— 15 1,283 608 — — — 1,906 
that are credit impaired— — 4,653 6,846 — — — 11,499 
Other170 254 1,216 6,361 43 2,890 — 10,934 
that are not credit impaired170 254 1,207 6,361 43 — — 8,035 
with significant increase in credit risk— — — — — — — — 
that are credit impaired— — 9 — — 2,890 — 2,899 
Total$360,035 $620,694 $413,119 $405,196 $28,641 $2,890 $— $1,830,575 
The table below presents the Group's loan portfolio by credit quality classification as of March 31, 2025.
Term Loans by Origination Fiscal Year
20252024202320222021PriorRevolving loansTotal
Mortgage loans$336,535 $186,816 $370,588 $30,591 $— $— $— $924,530 
that are not credit impaired336,051 184,610 367,918 29,876 — — — 918,455 
with significant increase in credit risk410 1,361 1,402 340 — — — 3,513 
that are credit impaired74 845 1,268 375 — — — 2,562 
Uncollateralized bank customer loans110,094 120,583 18,771 — — — — 249,448 
that are not credit impaired108,045 103,320 15,590 — — — — 226,955 
with significant increase in credit risk1,011 3,557 663 — — — — 5,231 
that are credit impaired1,038 13,706 2,518 — — — — 17,262 
Right of claim for purchased retail loans151,237 30,702 1,688 8 — — — 183,635 
that are not credit impaired151,237 30,702 1,688 8 — — — 183,635 
with significant increase in credit risk— — — — — — — — 
that are credit impaired— — — — — — — — 
Car loans5,974 116,459 33,907 — — — — 156,340 
that are not credit impaired5,974 110,871 26,014 — — — — 142,859 
with significant increase in credit risk— 1,603 836 — — — — 2,439 
that are credit impaired— 3,985 7,057 — — — — 11,042 
Collateralized bank customer loans140,835 7,788 136 — — — — 148,759 
that are not credit impaired138,761 7,498 136 — — — — 146,395 
with significant increase in credit risk2,020 73 — — — — — 2,093 
that are credit impaired54 217 — — — — — 271 
Other232 1,237 6,323 46 — — — 7,838 
that are not credit impaired232 1,229 6,323 46 — — — 7,830 
with significant increase in credit risk— — — — — — — — 
that are credit impaired— 8 — — — — — 8 
Total$744,907 $463,585 $431,413 $30,645 $— $— $— $1,670,550 
Aging analysis of past due loans as of June 30, 2025 and March 31, 2025, is as follows:
June 30, 2025
Loans 30-59 Days past due Loans 60-89 days past due Loans 90 days or more past due and still accruingCurrent loansTotal
Mortgage loans$2,998 $1,540 $3,159 $956,171 $963,868 
Uncollateralized bank customer loans3,227 3,093 22,627 229,714 258,661 
Right of claim for purchased retail loans— — — 226,357 226,357 
Collateralized bank customer loans215 236 520 222,726 223,697 
Car loans1,050 856 11,499 133,653 147,058 
Other— — 9 10,925 10,934 
Total$7,490 $5,725 $37,814 $1,779,546 $1,830,575 
March 31, 2025
Loans 30-59 Days past due Loans 60-89 days past due Loans 90 days or more past due and still accruingCurrent loansTotal
Mortgage loans$2,835 $678 $2,562 $918,455 $924,530 
Uncollateralized bank customer loans3,132 2,099 17,262 226,955 249,448 
Right of claim for purchased retail loans— — — 183,635 183,635 
Car loans1,548 892 11,041 142,859 156,340 
Collateralized bank customer loans957 1,135 271 146,396 148,759 
Other— — 8 7,830 7,838 
Total$8,472 $4,804 $31,144 $1,626,130 $1,670,550 
The activity in the allowance for credit losses for the three months ended June 30, 2025 and 2024 is summarized in the following tables.
Allowance for credit losses
Mortgage loanUncollateralized bank customer loansCollateralized bank customer loansCar loansRight of claim for purchased retail loansOtherTotal
March 31, 2025
$(10,699)$(35,479)$(3,114)$(8,465)$(17,333)$(25)$(75,115)
Charges(2,027)(10,143)(907)(1,055)(8,239)(2,925)(25,296)
Recoveries3,571 3,871 1,473 1,145 6,895 — 16,955 
Write off3 — — — — 24 27 
Forex296 1,106 85 247 522 — 2,256 
June 30, 2025
$(8,856)$(40,645)$(2,463)$(8,128)$(18,155)$(2,926)$(81,173)
Allowance for credit losses
Mortgage loanUncollateralized bank customer loansCollateralized bank customer loansCar loansRight of claim for purchased retail loansOtherTotal
March 31, 2024$(3,033)$(19,636)$(80)$(14,262)$(6,577)$(31)$(43,619)
Charges(728)(6,389)(116)(1,526)(1,490)(6)(10,255)
Recoveries295 3,733 20 3,938 3,473 11,459 
Write off— — 4 109 — — 113 
Forex180 1,160 9 621 246 2,216 
June 30, 2024$(3,286)$(21,132)$(163)$(11,120)$(4,348)$(37)$(40,086)