Pencil Finance has successfully completed a $1 million student-loan bundle, executing the entire funding and repayment cycle on-chain.
The financing supported more than 6,600 students across 118 educational institutions.
The company has not disclosed interest rates, investor yields, default rates, or blockchain transaction records.
The Animoca Brands-incubated Pencil Finance has announced the completion of a $1 million student-loan cycle conducted entirely on-chain, encompassing capital raising from investors, repayment recording, and fund returns with yield.
Education-financing firm ErudiFi issued the underlying loans, while Pencil Finance, functioning as a decentralized lending protocol, structured them as an on-chain private-credit investment. This arrangement enabled funders to provide capital and track repayments through transparent blockchain records.
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Pencil Finance has characterized this as the first fully on-chain student-lending cycle, though this claim could not be independently verified. The funding bundle received contributions from Animoca Brands, Open Campus, and NewCampus in July 2025.
“The protocol deployed loans totaling US$1 million to borrowers, managed repayments, and returned capital to the bundle’s funders with yield, with every step recorded transparently on blockchain,” Animoca Brands stated in a post on X.
The protocol operates on EDU Chain, an education-focused Ethereum-based network constructed using Arbitrum Orbit. Pencil Finance was co-incubated by Animoca Brands and the developer community HackQuest.
ErudiFi deployed the majority of the bundle through student loans and tuition financing across Southeast Asia, including Indonesia and the Philippines. According to the company, the capital supported loans for more than 6,600 students at 118 institutions over a 12-month period, with approximately 1,050 students receiving funding directly attributable to Pencil Finance.
Investors were structured into two tranches: a senior tranche providing fixed returns with priority repayment, and a junior tranche offering variable returns while absorbing initial losses from defaults.
Across ErudiFi’s broader portfolio, 50% of borrowers are women, 93% come from lower-income households, and 52% are accessing formal credit for the first time, according to the company.
“Education lenders in emerging markets are creditworthy but invisible. Global capital can’t verify their performance, so it never reaches them,” said Frank Li, co-founder of Pencil Finance, in a statement. “Putting the lending cycle on-chain changes that: every repayment is recorded and auditable by anyone, in real time. This bundle built a public track record that makes the next bundle easier to fund.”
