Pencil Finance Completes $1M Onchain Lending Cycle for 6.6K Students in Southeast Asia
Pencil Finance, a real-world asset (RWA) protocol, has completed its inaugural fully onchain student loan cycle totaling $1 million. This milestone enabled thousands of Southeast Asian students, traditionally underserved by conventional lenders, to access financing recorded transparently on the blockchain.
Financing Structure and Key Participants
The lending cycle was funded in July 2025 by three main investors: Animoca Brands, Open Campus, and New Campus. The capital was structured into a senior tranche offering fixed returns and a junior tranche carrying variable returns with first-loss risk.
Pencil Finance acted as the lender on the blockchain, deploying $1 million of capital packaged into a bundle for borrowers, with repayments generating yield for the funders.
Student Outreach and Program Scale
Approximately 6,600 students across 118 schools and universities in Southeast Asia accessed loans during the cycle, with around 1,050 receiving direct funding.
The loans targeted students underserved by traditional lenders, with 50% female borrowers and 93% coming from lower-income households.
Technical Innovation and Market Impact
Pencil Finance claims this is the first-ever fully onchain student lending cycle, with all operations and transactions transparently recorded on the blockchain network.
This model exemplifies the growing use of tokenized real-world assets to issue and collateralize loans, improving financial inclusion and transparency for marginalized groups.
Context of Real-World Asset Tokenization
This funding event coincides with broader trends of real-world asset tokenization in lending. For instance, Brazil’s B3 stock exchange issued a loan of 100,000 Brazilian reais ($19,600) secured by 10 tokenized cows in July.
Each cow was represented by a unique digital token linked to an encrypted digital identity, while AI-powered smart collars from agtech firm Cowmed monitored the animals’ health.
Why it matters
This news is significant as it showcases the practical implementation of fully onchain student lending, enhancing transparency and accessibility of financing for traditionally underserved segments. The approach has the potential to greatly expand educational opportunities for students in regions with limited banking infrastructure and opens new avenues for utilizing tokenized real-world assets in finance.
Prepared from the source material with AI-assisted editing and checked against the supplied facts.
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