A 1.1 billion tenge (about $2 million) securitized bond issue has been listed on the Kazakhstan Stock Exchange (KASE). The transaction was arranged by Freedom Broker. It marks the first securitization on Kazakhstan’s organized market in seven years. The securities are available to retail investors.
How the deal was structured
Freedom Credit, a microfinance organization, acted as the originator — the initial owner of the assets being securitized. The company holds a consumer microloan portfolio; from this, high-quality assets worth approximately $3.4 million were selected.
As required by law, a special financial company, SFC FF-1, was established. Freedom Credit transferred a pool of microloans to SFC FF-1 under an assignment agreement. SFC FF-1 then issued $2 million in bonds, which were subsequently listed on KASE.
The bonds offer an annual yield of 20%, and investors have purchased the entire issue. The bonds now trade on KASE’s secondary market.
Funding tool
Securitization is a process in which a bank, microfinance institution, insurance company or leasing firm pools assets — such as loans — into a portfolio and issues bonds backed by those assets to investors. Investors receive payments from the cash flow of the underlying assets.
Through securitization, financial institutions can attract funding without increasing their balance sheet debt burden.
Notably, Kazakhstan’s lending market contains tens of trillions of tenge in potential underlying assets suitable for securitization. As of Aug. 1, 2025, the National Bank reported that loans to the economy totaled about $86 billion, reflecting a year-on-year increase of 23.8%. Meanwhile, the Agency for Regulation and Development of the Financial Market reported that household loans totaled about $42 billion.
