Pencil Finance Uses Blockchain to Power $1 Million in Student Loans

When Maria, a nursing student in Davao City, received her tuition bill this semester, she feared she would have to take another year off. Her family had already borrowed from relatives, and local loan options came with sky-high interest rates. But then, something new happened. Through her school, Maria discovered a student loan funded by something she had never heard of before—blockchain. That loan came from Pencil Finance, and it arrived not through a bank, but through a transparent, on-chain process that gave her exactly what she needed, right when she needed it.

Good to know

• Pencil Finance raised and deployed $1 million for student loans entirely on-chain.
• Backers include Animoca Brands, Open Campus, and NewCampus.
• ErudiFi and Transcend Network are already using the funds to support students and founders.

Pencil Finance, built on EDU Chain and co-incubated by Animoca Brands and HackQuest, just rolled out its first batch of student loans using funds raised completely on-chain. Instead of relying on the old-school banking system, it used blockchain to make everything transparent and fast.

The total raised for this round came to $1 million. Most of that—$750,000—went into a Senior Tranche, giving contributors a fixed 15% annual return. The remaining $250,000 landed in a Junior Tranche, which carries more risk but offers a flexible return.

That money is already in use. Education financing provider ErudiFi is using it to support students in countries like Indonesia and the Philippines. Meanwhile, Transcend Network has tapped into the funds to help founders across 60+ countries grow education-related startups through its 12-week program.

Pencil Finance’s platform lets users supply capital into loan pools. From there, the money goes to students, and repayments are tracked right on the blockchain. It is all transparent, trackable, and designed to cut out red tape.

Frank Li, who co-founded Pencil Finance, said the project is about more than just using new tech:

“This milestone is more than just a technical achievement—it’s proof that blockchain can drive meaningful social impact.”

Yat Siu from Animoca Brands added:

“Pencil Finance demonstrates how decentralized technology can directly empower learners and transform access to education worldwide.”

HackQuest’s Cameron Wang called it a key moment, pointing to the fact that using blockchain for something as everyday as student loans might open the door to new ways of handling money for real-world problems.

So, as more students like Maria find new paths to fund their education, the question becomes: could this be the start of a better system for all?