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Pencil Finance Launches $1M Student Loan Initiative in Southeast Asia
Pencil Finance, a decentralized lending startup, has announced a $1 million deployment for student loans in the Philippines and Indonesia, aiming to enhance education financing in emerging markets. The initiative pools investor funds into structured loan tranches via smart contracts on the EDU Chain, a Layer-3 blockchain. Initial liquidity came from Animoca Brands and other partners. The protocol manages loan disbursement and repayments on-chain, with a $750,000 senior tranche offering a fixed 15% annual yield and a $250,000 junior tranche with variable returns. Funds are converted into local currencies by education partners like ErudiFi, which has extensive experience in the region. While the protocol decentralizes capital flow and governance, borrower evaluation remains centralized. Pencil Finance aims to transition governance to $PEN token holders. The student loan market is valued at $3.3 trillion, and tokenizing even a fraction could significantly increase blockchain value. However, high interest rates in emerging markets pose challenges for students seeking loans. Read more AI-generated news on: https://app.chaingpt.org/news
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