Pencil Finance closed a $1M student loan cycle. Lenders got 15% fixed

A tokenized loan pool went out, came back, and paid its funders. Pencil Finance said this week it completed a full onchain student lending cycle: $1 million deployed in July 2025, repaid over twelve months by borrowers in the Philippines and Indonesia. The senior tranche carried a fixed 15% APY.

The structure

Animoca Brands, Open Campus and New Campus funded the pool on EDU Chain, split into two tranches. $750,000 sat in the senior tranche at a fixed 15% APY. $250,000 sat in the junior tranche on a variable return, absorbing losses first. Pencil lent through education financing providers ErudiFi and Transcend Network rather than to students directly.

Who got the money

The pool reached more than 6,600 students across 118 schools and universities, with about 1,050 receiving direct funding. Pencil's breakdown of the portfolio: half the borrowers were women, 93% came from lower-income households, and 52% were accessing formal credit for the first time.

The numbers the announcement leaves out

The announcement lists the impact figures and stops. It gives no interest rate for the students, no default rate, and no figure for what the junior tranche returned against its variable target. Those three numbers decide whether this pool is a durable credit business or a subsidised demonstration. A lender promising 15% fixed to its senior investors has to charge borrowers above that to cover the spread, the servicing and the losses.

Emerging-market student lending runs at those levels through banks too, so the rate is not an accusation. It is a gap in a release that published everything else.

Most DeFi lending is overcollateralised: the borrower locks up more value than they take out, and the contract sells the collateral if the price moves. A student has none to post. That is why this pool needed a junior tranche willing to absorb the first losses, and why the missing default rate carries more weight here than it would in a crypto-collateralised pool.

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

— Frank Li, co-founder, Pencil Finance, At the launch, Animoca Brands, 10 July 2025

Quote source: Animoca Brands, 10 July 2025

The value of a small number

$1 million is nothing next to the tokenized treasury products institutions have been building. We wrote on Monday that Coinbase's tokenization pitch is a thesis rather than a track record, and this is the shape the missing evidence takes: a small pool, real borrowers, a completed round trip. Bitfinex Securities raised $50 million against tokenized nickel last week, fifty times the size and nowhere near the same test, because commodity paper does not have to survive 1,050 individual repayment schedules.

The question for the next cycle is whether Pencil can raise a second pool at a lower coupon. Fifteen percent buys a first mover. A repeat at ten would say somebody has seen the first set of repayments and priced the credit risk from data.

This piece is informational, not a recommendation to buy, sell, or hold any asset.