Convergence of Blockchain and Machine Learning For Peer-To-Peer Money Lending

Abstract

The economy has undergone a huge downward shift post the pandemic and we are all victims of the same. Financially-stricken individuals, SMEs, household ventures, and even organizations, and companies were heavily dependent on third-party entities like banks for loans. This would lead to rejections of loans as banks did not receive trusted collateral in return. In this solution, Machine Learning is used to decide whether a loan must be approved or not and even predict the Rate of Interest for a particular borrower. If a borrower is applying for a loan for the first time then his credit score will be considered other his creditworthiness which depends on his credit score will be checked too. Based on this, if the borrower is genuine, he’ll be made available on the platform for the lenders to view. Blockchain technology is used to provide a decentralized platform using Polygon Edge, which is an emerging private blockchain network because it is best suited when choosing a scaling solution for any application. This platform also uses the concept of distributed lending, wherein multiple lenders and borrowers create a peer-to-peer lending system backed by the security of blockchain technology. To tackle the aspect of collateral, the solution is considering using property value as one of the features. In short, this platform intends to automate the loan approval process by incorporating machine learning, which will assist save time and energy while improving the process, and to establish a private Blockchain network of lenders/investors and borrowers.