I made this blanket forever ago from one of those kits you can find at Michaels and finished the back with a really cute/easy technique.
This is the back of the blanket. To make you need to cut fabric squares of the size you want (these are about 5x5 inches) then sew with the wrong sides facing each other (this is backwards from what you would usually do) you want the seams on the OUTSIDE! Make sure to sew about 1/2-1 inch in depending on how large of fringe you want and sew with small tight stitches. Then using your scissors snip every 1/2 inch. This technique works best on non-fraying fabric unless you want it to get all fuzzy and loved looking like this then use cotton fabric and after you sew it all together throw it in the washing machine to fray all of the ends.