Pencil Finance funded 1,000 student loans on-chain for Southeast Asian borrowers, but lacks disclosed borrower costs, defaults, or investor returns.
Tech & Launches ·
Pencil Finance, incubated by Animoca Brands, says it has completed a $1 million student-loan funding and repayment cycle recorded entirely on blockchain. The cycle deployed capital across Southeast Asia through ErudiFi, an education-financing company, reaching over 6,600 students across 118 institutions, with approximately 1,050 loans directly attributable to Pencil Finance. Animoca Brands, Open Campus, and NewCampus provided the initial capital in July 2025. The protocol operates on EDU Chain, an Ethereum-based network built using Arbitrum Orbit, and structured investors into senior and junior tranches with different risk and return profiles.
Pencil Finance claims this marks the first fully on-chain student-lending cycle, though the assertion could not be independently verified. The company highlighted that all steps—from capital deployment through repayments—were recorded on blockchain, creating an auditable track record. According to ErudiFi's data, 52% of borrowers are using formal credit for the first time, half are women, and 93% come from lower-income households.
The project disclosed no information about borrower interest rates, investor yields, default rates, or specific blockchain transaction records. The mechanics by which on-chain recording enhances verification and capital flow to education lenders in emerging markets remain untested at scale beyond this single cycle.