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Project Story – Digital Invoice

Inspiration

MSMEs lose 25–30% of their working capital because invoices are paid after 60–120 days. Banks usually demand collateral that small businesses don’t have, forcing them to take informal loans at 24–36% interest. Seeing good businesses fail only due to cash-flow delays inspired us to build a system where data replaces collateral.

What it does

Digital Invoice converts real business activity into trusted digital credit. Verified data from weight bridges, GPS, engineer checks, and ERP invoices is used to calculate a machine-learning risk score. Each approved invoice is tokenized as blockchain-based digital collateral, enabling fast, transparent, and low-cost financing for MSMEs.

How we built it

We built a live prototype using Next.js for forms and dashboards, Node.js for backend services, XGBoost for risk scoring, and Polygon smart contracts to tokenize invoices. The system follows a clear flow: data capture → verification → ML scoring → blockchain collateral → funding.

Challenges we ran into

The biggest challenges were ensuring data authenticity, designing a fair risk model for MSMEs, and integrating ML outputs with blockchain logic. Aligning the system with digital lending and compliance requirements was also complex.

Accomplishments that we're proud of

We built a working prototype that processes loans 75× faster than banks and at 60% lower cost, delivering around 8.1% yield. The model shows that ₹2 crore can fund 100 MSMEs and unlock ₹50 crore in working capital.

What we learned

We learned that combining real-world data, AI, and blockchain can solve deep financial problems. Trust can be created digitally without traditional collateral when systems are transparent and verifiable.

What's next for Digital Invoice

Next, we plan to onboard more MSMEs, integrate lenders, improve the risk model with more data, and scale the platform to unlock MSME credit at a national level.

Built With

• and
• cloud
• deployment
• express.js
• github
• ipfs-(for-invoice-storage)
• javascript
• json
• next.js
• node.js
• polygon-blockchain
• python
• rest-apis
• solidity-smart-contracts
• typescript
• xgboost-(ml)