Pencil Finance has taken a significant step in linking decentralized finance with real-world needs by successfully raising $1 million in on-chain capital for student loans. The announcement, made on July 10, revealed that this student loan capital—entirely sourced via blockchain technology—will be deployed to support higher education in emerging economies, particularly in Asia.
The loan capital, mobilized through the Pencil Finance platform, is intended to enhance access to university education in countries such as Indonesia and the Philippines. ErudiFi, a firm specializing in education financing across Southeast Asia, will act as the distribution partner, disbursing student loans to university students in need of tuition support.
Investors to Receive Yield-Based Returns
Those who contributed funds to the initiative are expected to earn returns tied to the repayment of student loans. Out of the total $1 million, $750,000 has been earmarked to offer a fixed annual yield of 15%, while the remaining $250,000 is structured with a variable yield and a first-loss risk component. This model reflects a blended approach to yield generation, incorporating both fixed and risk-adjusted returns for investors.
The initiative marks Pencil Finance’s inaugural deployment of capital into the real world using fully on-chain processes, signaling a new direction for blockchain-based financial services. The company is positioning its platform as a tool to bridge the gap between decentralized financial systems and tangible social impact, starting with education.
Backing from Animoca Brands
Hong Kong-based Animoca Brands, a prominent player in the blockchain ecosystem, has extended its support to Pencil Finance. The firm, known for its involvement in gaming, NFTs, and blockchain venture capital, has expressed optimism about the broader implications of this project. According to its executive team, Pencil Finance has demonstrated that decentralized technology can be harnessed for socially beneficial outcomes, particularly in global education access.
Animoca’s leadership emphasized that the initiative proves blockchain is more than just a tool for speculative investment or gaming applications. Instead, it can be leveraged to empower learners in underrepresented markets by offering transparent and scalable financing solutions. The use of blockchain in this context is seen as a meaningful innovation capable of improving the efficiency and fairness of student loan distribution.
$1M Distributed to Fund Student Loans
The first $1 million raised on-chain has now been distributed to borrowers—directly funding student loans across Southeast Asia.
Real capital, real impact.
This is what DeFi looks like when it works for people.
Onward. pic.twitter.com/TrTpwCJqER
— Pencil Finance (@pencilfinance_) July 10, 2025
Expanding Educational Opportunities Through DeFi
Pencil Finance co-founder Frank Li expressed confidence in the platform’s ability to drive social impact through decentralized technologies. He underscored the platform’s core objective: to expand educational access for students in less privileged regions. According to him, this project enables students in emerging markets to access funding mechanisms that are more transparent and efficient than traditional systems.
The company is aiming to provide long-term value not just for investors seeking returns, but also for students whose future prospects depend heavily on affordable education financing. This dual-value proposition—economic return coupled with social benefit—forms the foundation of Pencil Finance’s approach to real-world asset integration on the blockchain.
Blockchain’s Expanding Role in Impact Finance
The initiative by Pencil Finance reflects a broader trend within the decentralized finance ecosystem: the growing push to connect on-chain capital with real-world applications. By focusing on education, Pencil Finance is not only contributing to human capital development in emerging regions but also showcasing a proof of concept for how decentralized tools can address pressing global challenges.
Animoca Brands’ ongoing investment in similar Web3-enabled ventures across Asia further underscores the increasing role of blockchain technology in sectors beyond gaming and crypto trading. As more blockchain startups begin to explore socially conscious applications, student lending through on-chain platforms may emerge as a viable model for inclusive and sustainable finance.