Pencil Finance has completed a $1 million on-chain student lending cycle after the capital was deployed to borrowers, repaid and returned to the bundle’s funders with yield.
The student loan real-world asset protocol said in a September 3 announcement that each stage of the cycle was recorded on EDU Chain. Pencil Finance is co-incubated by Animoca Brands and HackQuest.
From funding to repayment
Animoca Brands, Open Campus and NewCampus funded the $1 million bundle in July 2025. It was divided into a senior tranche offering fixed returns and a junior tranche offering variable returns with first-loss risk.
The completion marks a new stage for the initiative. Pencil Finance had previously announced the deployment of the capital, but the latest update covers the servicing of the underlying loans and the return of principal and yield to the funders.
The company described the transaction as the first student lending cycle to be completed entirely on-chain. That first-of-its-kind characterization has not been independently verified.
Pencil Finance did not disclose the realized return for either tranche, the default rate, the number of individual loans in the bundle or public transaction identifiers that would allow the full repayment record to be independently audited. Its bundle dashboard lists a $1 million investment and a final annual percentage yield of 7.79 percent for the OC-X Student Loan Financing B1 pool.
Loans reached students in Southeast Asia
Education financing provider ErudiFi received the largest share of the loan capital, according to the announcement. It used the funding for student loans and tuition financing in Southeast Asia, including the Philippines and Indonesia.
Pencil Finance said its capital contributed to loans supporting more than 6,600 students at 118 schools and universities over the past 12 months. Within that broader group, it estimated that about 1,050 students received direct funding from the bundle.
The distinction is important because the 6,600 figure represents students whose loans were supported by the wider financing activity, rather than borrowers funded solely by the Pencil Finance capital.
Across ErudiFi’s portfolio, Pencil Finance said 50 percent of borrowers were women, 93 percent came from lower-income households and 52 percent were accessing formal credit for the first time. The company did not publish the methodology or underlying loan-level data for those portfolio figures.
Borrower study provides additional context
Research firm 60 Decibels separately reported findings from interviews with 301 ErudiFi borrowers in Indonesia and the Philippines. It said 90 percent of respondents reported that their quality of life had improved because of the education loan, while 97 percent said they could not easily find a good alternative.
The study also found that 96 percent said the loan was their first experience with a product of its kind. It covered customers of ErudiFi’s Bukas platform in the Philippines and Danacita platform in Indonesia, and therefore offers borrower context rather than an audit of Pencil Finance’s on-chain transaction.
Pencil Finance operates on EDU Chain and connects capital providers with student loan originators through tokenized loan bundles. Loan providers convert the capital into local currency and pay tuition fees to schools on behalf of students. Borrower repayments then flow back through the loan provider to the on-chain pool.
The completed cycle gives Pencil Finance a repayment record for its first $1 million bundle. However, the small size of the transaction and the absence of detailed credit-performance data mean its scalability and risk profile remain to be demonstrated.
Pencil Finance announces $10M for student loan financing backed by Animoca Brands & Open Campus