Annual report [Section 13 and 15(d), not S-K Item 405]

LOANS ISSUED

v3.26.1
LOANS ISSUED
 12 Months Ended
Mar. 31, 2026
Receivables [Abstract]  
LOANS ISSUED LOANS ISSUED
Loans issued as of March 31, 2026, consisted of the following:
Amount Outstanding Due Dates Average Interest Rate Fair Value of
Collateral		 Loan Currency
 
Mortgage loans $ 1,149,000   April 2026 - May 2051 12.2% 1,148,860   KZT/TJS
Corporate loans 351,713   April 2026 - December 2040 18.0% 239,226   KZT
Loans to SME 195,495   April 2026 - November 2032 29.7% 28,141   KZT
Purchased retail loans 182,130   April 2026 - May 2031 22.6% —   KZT
Car loans 167,805   April 2026 - March 2033 25.4% 164,930   KZT
Retail loans 100,927   April 2026 - July 2045 42.0% 5,240   KZT
Other 32,335   April 2026 - May 2030
19.0%/5.2%/ 5.0%
 26  KZT/EUR/USD
Allowance for loans issued (101,799)
Total loans issued $ 2,077,606 

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 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 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 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 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 annual as described above. As of March 31, 2026 and March 31, 2025, the corresponding liability amounted to $554,594 and $503,705, respectively.

As of March 31, 2026 and March 31, 2025, mortgage loans include loans under the state mortgage program "7-20-25" with an aggregate principal amount of $568,065 and $511,851, respectively, were presented within loans issued in the Consolidated Balance Sheets.
The Group historically entered into 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 considered 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.

Although the Group obtained legal title to uncollateralized retail loans purchased from FFIN Credit, the Group did not recognize such loans in its consolidated financial statements under U.S. GAAP, as the transactions did not qualify for sale accounting due to contractual provisions under which FFIN Credit retained the credit risk. Accordingly, the Group accounted for these arrangements as financing transactions similar to secured borrowing-type arrangement, recognizing loans receivable from FFIN Credit within loans issued on the Condensed Consolidated Balance Sheets, while the underlying customer loans were treated as collateral.

Beginning in September 2025, the Company begun originating these loans through its banking subsidiary and discontinued the purchase of unsecured consumer loans from FFIN Credit.

During the fiscal year ended March 31, 2026, FFIN Credit and the Group agreed that FFIN Credit would make a compensation payment to the Group of approximately $23 million ($20 million discounted), payable over a period of up to two years. In exchange, the Company agreed to release FFIN Credit from the contractual provisions that provided credit protection to the Company covering a total of $215 million of outstanding loans at December 31, 2025. As a result of these modifications, the Group determined that it should recognize the loans previously purchased from FFIN Credit as of December 31, 2025 in the amount of $186 million.

The total accrued interest for loans issued amounted $20,133 as of March 31, 2026 and $13,385 as of March 31, 2025.
Loans issued as of March 31, 2025, consisted of the following:
  Amount Outstanding Due Dates Average Interest Rate Fair Value of
Collateral		 Loan Currency
Mortgage loans $ 924,530  April 2025 - March 2050 11.4% $ 924,386  KZT
Loans to SME 244,217  April 2025 - February 2032 28.6% 35,141  KZT
Right of claim for purchased retail loans 183,635  April 2025 - March 2030 15.0% 183,635  KZT
Car loans 156,340  April 2025 - April 2032 24.2% 155,320  KZT
Corporate loans 149,143  April 2025 - December 2031 19.1% 92,739  KZT
Retail loans 4,847  September 2025 - March 2045 21.2% 663  KZT
Other 7,838  April 2025 - September 2029
18.0%/12.7%/3.0%
 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. 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 12 months 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 March 31, 2026.
Term Loans by Origination Year
2026 2025 2024 2023 2022 Prior Revolving loans Total
Mortgage loans $ 291,663  $ 307,056  $ 171,398  $ 352,105  $ 26,778  $ —  $ —  $ 1,149,000 
that are not credit impaired 290,224  302,323  168,147  348,614  26,374  —  —  1,135,682 
with significant increase in credit risk 1,245  2,710  1,860  1,875  243  —  —  7,933 
that are credit impaired 194  2,023  1,391  1,616  161  —  —  5,385 
Car loans 64,088  4,164  78,497  21,056  —  —  —  167,805 
that are not credit impaired 63,205  4,041  71,901  13,687  —  —  —  152,834 
with significant increase in credit risk 542  27  1,080  404  —  —  —  2,053 
that are credit impaired 341  96  5,516  6,965  —  —  —  12,918 
Loans to SME 52,758  59,627  72,382  10,728  —  —  —  195,495 
that are not credit impaired 49,372  53,303  60,112  8,363  —  —  —  171,150 
with significant increase in credit risk 1,392  2,258  3,192  506  —  —  —  7,348 
that are credit impaired 1,994  4,066  9,078  1,859  —  —  —  16,997 
Purchased retail loans 115,550  57,578  8,734  268  —  —  —  182,130 
that are not credit impaired 105,399  49,929  7,431  223  —  —  —  162,982 
with significant increase in credit risk 4,771  3,014  514  14  —  —  —  8,313 
that are credit impaired 5,380  4,635  789  31  —  —  —  10,835 
Corporate loans 310,024  41,594  95  —  —  —  —  351,713 
that are not credit impaired 308,278  41,050  95  —  —  —  —  349,423 
with significant increase in credit risk 647  —  —  —  —  —  —  647 
that are credit impaired 1,099  544  —  —  —  —  —  1,643 
Retail loans 97,334  2,853  708  32  —  —  —  100,927 
that are not credit impaired 95,717  2,409  470  30  —  —  —  98,626 
with significant increase in credit risk 1,064  93  20  —  —  —  —  1,177 
that are credit impaired 553  351  218  2  —  —  —  1,124 
Other 24,403  258  1,214  6,437  23  —  —  32,335 
that are not credit impaired 24,403  258  1,207  6,437  23  —  —  32,328 
with significant increase in credit risk —  —  —  —  —  —  —  — 
that are credit impaired —  —  7  —  —  —  —  7 
Total $ 955,820  $ 473,130  $ 333,028  $ 390,626  $ 26,801  $ —  $ —  $ 2,179,405 
The table below presents the Group's loan portfolio by credit quality classification as of March 31, 2025.
Term Loans by Origination Fiscal Year
2025 2024 2023 2022 2021 Prior Revolving loans Total
Mortgage loans $ 336,535  $ 186,816  $ 370,588  $ 30,591  $ —  $ —  $ —  $ 924,530 
that are not credit impaired 336,051  184,610  367,918  29,876  —  —  —  918,455 
with significant increase in credit risk 410  1,361  1,402  340  —  —  —  3,513 
that are credit impaired 74  845  1,268  375  —  —  —  2,562 
Loans to SME 98,556  126,835  18,826  —  —  —  —  244,217 
that are not credit impaired 96,338  109,461  15,647  —  —  —  —  221,446 
with significant increase in credit risk 1,185  3,612  663  —  —  —  —  5,460 
that are credit impaired 1,033  13,762  2,516  —  —  —  —  17,311 
Right of claim for purchased retail loans 151,237  30,702  1,688  8  —  —  —  183,635 
that are not credit impaired 151,237  30,702  1,688  8  —  —  —  183,635 
with significant increase in credit risk —  —  —  —  —  —  —  — 
that are credit impaired —  —  —  —  —  —  —  — 
Car loans 5,974  116,459  33,907  —  —  —  —  156,340 
that are not credit impaired 5,974  110,871  26,014  —  —  —  —  142,859 
with significant increase in credit risk —  1,603  837  —  —  —  —  2,440 
that are credit impaired —  3,985  7,056  —  —  —  —  11,041 
Corporate loans 148,599  470  74  —  —  —  —  149,143 
that are not credit impaired 146,785  470  74  —  —  —  —  147,329 
with significant increase in credit risk 1,813  —  —  —  —  —  —  1,813 
that are credit impaired 1  —  —  —  —  —  —  1 
Retail loans 3,774  1,066  7  —  —  —  —  4,847 
that are not credit impaired 3,682  887  5  —  —  —  —  4,574 
with significant increase in credit risk 34  18  —  —  —  —  —  52 
that are credit impaired 58  161  2  —  —  —  —  221 
Other 232  1,237  6,323  46  —  —  —  7,838 
that are not credit impaired 232  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 March 31, 2026 and March 31, 2025, is as follows:
March 31, 2026
Loans 30-59 days past due Loans 60-89 days past due Loans 90 days or more past due and still accruing Current loans Total
Mortgage loans 5,781  2,152  5,385  1,135,682  1,149,000 
Corporate loans 468  179  1,643  349,423  351,713 
Loans to SME 3,980  3,368  16,997  171,150  195,495 
Purchased retail loans
 4,348  3,965  10,835  162,982  182,130 
Car loans 1,423  630  12,918  152,834  167,805 
Retail loans 701  476  1,124  98,626  100,927 
Other —  —  7  32,328  32,335 
Total $ 16,701  $ 10,770  $ 48,909  $ 2,103,025  $ 2,179,405 
March 31, 2025
Loans 30-59 days past due Loans 60-89 days past due Loans 90 days or more past due and still accruing Current loans Total
Mortgage loans $ 2,835  $ 678  $ 2,562  $ 918,455  924,530 
Loans to SME 3,325  2,135  17,311  221,446  244,217 
Right of claim for purchased retail loans —  —  —  183,635  183,635 
Car loans 1,548  892  11,041  142,859  156,340 
Corporate loans 730  1,083  1  147,329  149,143 
Retail loans 36  16  221  4,574  4,847 
Other —  —  8  7,830  7,838 
Total $ 8,474  $ 4,804  $ 31,144  $ 1,626,128  $ 1,670,550 
The activity in the allowance for credit losses as of March 31, 2026 and March 31, 2025 is summarized in the following tables.
Allowance for credit losses
Mortgage loan Loans to SME Corporate loans Retail loans Car loans Purchased retail loans Other Total
March 31, 2025
 (10,699) (35,192) (2,640) (761) (8,465) (17,333) (25) $ (75,115)
Charges (7,515) (32,115) (6,348) (8,878) (8,238) (33,653) (50) (96,797)
Reversals 11,064  15,674  3,793  3,544  3,442  22,242  —  59,759 
Write off 40  14,897  —  —  253  —  —  15,190 
Modification —  —  —  —  —  908  —  908 
Forex (278) (2,016) (352) (478) (828) (1,792) —  (5,744)
March 31, 2026
 $ (7,388) $ (38,752) $ (5,547) $ (6,573) $ (13,836) $ (29,628) $ (75) $ (101,799)
Allowance for credit losses
Mortgage loan Loans to SME Corporate loans Retail loans Car loans Right of claim for purchased retail loans Other Total
March 31, 2024
 (3,033) (19,556) (10) (150) (14,262) (6,577) (31) $ (43,619)
Charges (10,043) (38,653) (4,191) (754) (5,335) (20,324) (24) (79,324)
Reversals 1,694  6,757  1,449  96  6,761  8,331  —  25,088 
Write off 1  13,276  —  4  2,914  —  30  16,225 
Forex 682  2,984  112  43  1,457  1,237  —  6,515 
March 31, 2025
 $ (10,699) $ (35,192) $ (2,640) $ (761) $ (8,465) $ (17,333) $ (25) $ (75,115)