Pencil Finance Completes 1 Million USD On-Chain Student Loan Cycle

Pencil Finance has completed a 1 million USD student-loan cycle on-chain, involving investor capital raising, repayment recording, and fund return with yield. The loans were issued by ErudiFi and packaged by Pencil Finance as an on-chain private-credit investment, enabling funders to supply capital and monitor repayments via blockchain. This is claimed to be the first fully on-chain student-lending cycle, though this claim is unverified. The funding was provided by Animoca Brands, Open Campus, and NewCampus in July 2025. The protocol deployed loans totaling 1 million USD to borrowers, with all transactions recorded on the blockchain. Pencil Finance operates on EDU Chain, an Ethereum-based network. Most loans were issued for student financing across Southeast Asia, benefiting over 6,600 students at 118 institutions, with approximately 1,050 funded directly through Pencil Finance. Investors were categorized into senior and junior tranches, with varying returns and risk exposure. According to ErudiFi, half of the borrowers are women, 93% are from low-income households, and 52% are first-time credit users. Frank Li, co-founder of Pencil Finance, emphasized that on-chain lending cycles enhance transparency and verifiability, making future funding easier.

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