Trading 4.0: An Online Peer-to-Peer Money Lending Platform

Abstract

Online money lending platforms also referred to as peer-to-peer lending platforms are a mean of lending and borrowing money between private individuals mostly via an online web-based platform. Transactions are often done without the direct arbitration of financial institutions, such as banks or other financial agencies. In 2005 the first money lending platform called Zopa was created in the United Kingdom, and several other have since followed. The exponential growth of Internet has been instrumental to the widespread adoption of peer-to-peer lending, as transactions can now be carried from anywhere via the Internet. However, despite the comfort, security of transactions and fraud prevention is still a challenge. The objective of this paper is to develop a Cloud-based money lending platform using both direct and reverse auction mechanisms based on blockchain technology to secure transactions between lenders and borrowers. The developed prototype uses knapsack and perfect sum algorithms in both direct and reverse auctioning mode, to determine the least compromising match between loan requests and offers. After rigorous testing, obtained results showed that indeed the system can meet user requirements in a secure manner.