Pencil Finance completes $1 million on-chain student loan funding cycle

Pencil Finance has completed a $1 million student-loan funding and repayment cycle on-chain, which was funded in July 2025 by Animoca Brands, Open Campus, and NewCampus. The underlying loans, issued by ErudiFi, supported over 6,600 students across Southeast Asia, primarily in Indonesia and the Philippines. While Pencil Finance highlights the transparency of recording repayments on the EDU Chain, the protocol did not disclose specific interest rates, investor yields, defaults, or transaction records.

On-chain student loan funding cycle

• ▪Pencil Finance completed a $1 million student-loan cycle on-chain, from raising investor capital to recording repayments and returning funds with yield.
• ▪Pencil Finance, which operates on the Ethereum-based network EDU Chain, was co-incubated by Animoca Brands and the developer community HackQuest.
• ▪Animoca Brands, Open Campus, and NewCampus funded the $1 million student-loan bundle in July 2025.

ErudiFi loan deployment reach

• ▪Education-financing company ErudiFi deployed the $1 million bundle through student loans and tuition financing across Southeast Asia, including Indonesia and the Philippines.
• ▪ErudiFi's loan bundle supported more than 6,600 students at 118 institutions over 12 months, with approximately 1,050 students receiving funding directly attributable to Pencil Finance.

Blockchain transparency for verification

• ▪Pencil Finance claimed the transaction was the first fully on-chain student-lending cycle, though the claim could not be independently verified.
• ▪Pencil Finance did not disclose interest rates, investor yields, defaults, or blockchain transaction records for the $1 million student-loan cycle.

Emerging market education financing

• ▪Across ErudiFi's portfolio, half of the borrowers are women, 93% come from lower-income households, and 52% are using formal credit for the first time.
• ▪Pencil Finance co-founder Frank Li stated that putting the lending cycle on-chain allows global capital to verify the performance of emerging market education lenders.

Tranche structure for investors

• ▪Education-financing company ErudiFi issued the underlying loans, which Pencil Finance packaged as an on-chain private-credit investment for funders.
• ▪Investors in the Pencil Finance student-loan bundle were divided into a senior tranche offering fixed returns and repayment priority, and a junior tranche offering variable returns while absorbing first losses.

Debatable claims

• ▪On-chain private credit protocols must disclose interest rates and default data
• ▪On-chain lending is an effective tool for funding emerging-market education

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