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LOANS ISSUED
 3 Months Ended
Jun. 30, 2024
Loans and Leases Receivable Disclosure [Abstract]  
LOANS ISSUED LOANS ISSUED
Loans issued as of June 30, 2024, consisted of the following:
Amount OutstandingDue DatesAverage Interest Rate Fair Value of
Collateral		Loan Currency
 
Mortgage loans$724,295 July 2024 - June 204910.3%$724,294 KZT
Car loans227,234 July 2024 - April 203223.9%224,380 KZT
Uncollateralized bank customer loans231,833 July 2024 - June 204427.7%— KZT
Right of claim for purchased retail loans134,333 July 2024 - August 202915.0%134,333 KZT
Collateralized bank customer loans29,102 July 2024 - July 204319.3%27,982 KZT
Subordinated loan5,038 December 20253.0%— USD
Other2,803 August 2024 - January 2029
18.6%/15.0%/2.5%
33 
KZT/USD/EUR
Allowance for loans issued(40,086)
Total loans issued$1,314,552 
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% for 20 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% 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 3% 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 Condensed Consolidated Balance Sheets. This liability accrues 4% interest annually as described above. As of June 30, 2024 and March 31, 2024, the corresponding liability amounted to $505,659 and $521,885, respectively.
As of June 30, 2024 and March 31, 2024, mortgage loans include loans under the state mortgage program "7-20-25" with an aggregate principal amount of $519,016 and $532,389, respectively, were presented within loans issued in the Condensed Consolidated Balance Sheets.

The Group has an agreement with 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. 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 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 Consolidated Balance Sheets within the loans issued. As of June 30, 2024 and March 31, 2024, right of claims for purchased retail loans amounted to $134,333 and $146,152, respectively.

The total accrued interest for loans issued amounted to $8,277 as of June 30, 2024 and $8,327 as of March 31, 2024.
Loans issued as of March 31, 2024, consisted of the following:
Amount OutstandingDue DatesAverage Interest Rate Fair Value of
Collateral		Loan Currency
 
Mortgage loans$741,312 April, 2024 - March, 204910.3%$740,462 KZT
Car loans262,708 April, 2024 - March, 203123.9%259,755 KZT
Uncollateralized bank customer loans245,188 April, 2024 - March, 204427.4%— KZT
Right of claim for purchased retail loans146,152 April, 2024 - March, 202915.0%146,152 KZT
Collateralized bank customer loans22,299 June, 2024 - July, 204319.1%22,270 KZT
Subordinated loan5,037 December, 20253.0%— USD
Other2,638 April, 2024 - January, 2029
18.6%/15.0%/2.5%
18 
KZT/USD/EUR
Allowance for loans issued(43,619)
Total loans issued$1,381,715 
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, 2024. Current vintage disclosure is the requirement due to first adoption of ASC 326.
Term Loans by Origination Year
20252024202320222021PriorRevolving loansTotal
Mortgage loans$37,141 $223,214 $426,566 $37,374 $— $— $— $724,295 
that are not credit impaired37,141 221,389 423,582 37,002 719,114 
with significant increase in credit risk— 1,322 1,627 298 3,247 
that are credit impaired— 503 1,357 74 1,934 
Car loans661 170,230 56,343 — — — — 227,234 
that are not credit impaired661 165,792 45,318 211,771 
with significant increase in credit risk— 1,990 1,741 3,731 
that are credit impaired— 2,448 9,284 11,732 
Uncollateralized bank customer loans18,126 183,176 30,524 7 — — — 231,833 
that are not credit impaired18,058 168,030 25,547 — 211,635 
with significant increase in credit risk68 4,559 1,030 — 5,657 
that are credit impaired— 10,587 3,947 7 14,541 
Right of claim for purchased retail loans36,886 87,911 9,436 100 — — — 134,333 
that are not credit impaired36,886 87,911 9,436 100 134,333 
with significant increase in credit risk— — — — — 
that are credit impaired— — — — — 
Collateralized bank customer loans11,615 17,223 264 — — — — 29,102 
that are not credit impaired11,615 17,095 264 28,974 
with significant increase in credit risk— 128 — 128 
that are credit impaired— — — — 
Subordinated loan— — 5,038 — — — — 5,038 
that are not credit impaired— — 5,038 5,038 
with significant increase in credit risk— — — — 
that are credit impaired— — — — 
Other215 2,371 154 63 — — — 2,803 
that are not credit impaired215 2,362 154 63 2,794 
with significant increase in credit risk— — — — — 
that are credit impaired— 9 — — 9 
Total$104,644 $684,125 $528,325 $37,544 $— $— $— $1,354,638 
The table below presents the Group's loan portfolio by credit quality classification as of March 31, 2024.
Term Loans by Origination Year
20242023202220212020PriorRevolving loansTotal
Mortgage loans$241,848 $458,401 $41,063 $— $— $— $— $741,312 
that are not credit impaired240,974 454,933 40,784 — — — — 736,691 
with significant increase in credit risk676 2,415 111 — — — — 3,202 
that are credit impaired198 1,053 168 — — — — 1,419 
Car loans196,305 66,403 — — — — — 262,708 
that are not credit impaired193,302 55,427 — — — — — 248,729 
with significant increase in credit risk1,590 2,232 — — — — — 3,822 
that are credit impaired1,413 8,744 — — — — — 10,157 
Uncollateralized bank customer loans210,612 34,568 8 — — — — 245,188 
that are not credit impaired200,211 30,337 — — — — — 230,548 
with significant increase in credit risk4,715 1,072 — — — — — 5,787 
that are credit impaired5,686 3,159 8 — — — — 8,853 
Right of claim for purchased retail loans130,291 15,694 167 — — — — 146,152 
that are not credit impaired130,291 15,694 167 — — — — 146,152 
with significant increase in credit risk— — — — — — — — 
that are credit impaired— — — — — — — — 
Collateralized bank customer loans21,972 327 — — — — — 22,299 
that are not credit impaired21,796 327 — — — — — 22,123 
with significant increase in credit risk89 — — — — — — 89 
that are credit impaired87 — — — — — — 87 
Subordinated loan— 5,037 — — — — — 5,037 
that are not credit impaired— 5,037 — — — — — 5,037 
with significant increase in credit risk— — — — — — — — 
that are credit impaired— — — — — — — — 
Other2,404 165 69 — — — — 2,638 
that are not credit impaired2,395 165 69 — — — — 2,629 
with significant increase in credit risk— — — — — — — — 
that are credit impaired9 — — — — — — 9 
Total$803,432 $580,595 $41,307 $— $— $— $— $1,425,334 
Aging analysis of past due loans as of June 30, 2024 and March 31, 2024, is as follows:
June 30, 2024
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$1,762 $1,485 $1,934 $719,114 $724,295 
Car loans2,006 1,725 11,732 211,771 227,234 
Uncollateralized bank customer loans3,021 2,636 14,541 211,635 231,833 
Right of claim for purchased retail loans— — — 134,333 134,333 
Collateralized bank customer loans99 29 — 28,974 29,102 
Subordinated loan— — — 5,038 5,038 
Other— — 9 2,794 2,803 
Total$6,888 $5,875 $28,216 $1,313,659 $1,354,638 
March 31, 2024
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$2,133 $1,069 $1,419 $736,691 $741,312 
Car loans2,167 1,655 10,157 248,729 262,708 
Uncollateralized bank customer loans3,576 2,211 8,853 230,548 245,188 
Right of claim for purchased retail loans— — — 146,152 146,152 
Collateralized bank customer loans— 89 87 22,123 22,299 
Subordinated loan— — — 5,037 5,037 
Other— — 9 2,629 2,638 
Total$7,876 $5,024 $20,525 $1,391,909 $1,425,334 

The activity in the allowance for credit losses for the three months ended June 30, 2024 and 2023 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, 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)
Allowance for credit losses
Mortgage loanUncollateralized bank customer loansCollateralized bank customer loansCar loansRight of claim for purchased retail loansOtherTotal
March 31, 2023
$(554)$(233)$— $(758)$(1,247)$— $(2,792)
Adjustment to allowance for adoption of ASU 2016-13(2,216)(7,436)(35)(6,462)(9,046)— (25,195)
Charges— (7,755)(55)(2,948)(5,346)(3,261)(19,365)
Recoveries284 1,602 8 272 3,345 — 5,511 
Forex3 64 2 34 34 — 137 
June 30, 2023
$(2,483)$(13,758)$(80)$(9,862)$(12,260)$(3,261)$(41,704)