But it definitely needs a mechanism to better handle the images themselves. I think snapchat or whatever has a mechanism to (attempt to) prevent screenshots and to delete the images after a criteria is met (time limited, if memory serves)? An open source solution on a trusted server would help a lot with this.
Getting more in to institutional solutions here (and if the loan seekers were able to be approved by those they wouldn't need it), but I could see something like:
1. Seeker and Lender agree to terms. Specifically interest rates and minimum payment requirements.
2. Seeker takes photo and uploads to service.
3. Seeker then uses service to blur out particularly sensitive portions while leaving face visible. Lender sees that image exists, and either approves or requests a different blurring to ensure body shaming will be sufficient
4. Seeker must then register all payments with service (bitcoin would actually be a great solution to this, funny enough). If service does not recognize sufficient payment being made by all dates, image is sent, unblurred, to lender to use as they see fit
5. Once terms of loan are complete, image is deleted. This is the biggest problem as we know the data won't be deleted, if only because getting it out of all the back-ups is a huge hassle.