With the goal of evaluating the efficiency and transparency gains as well as the obstacles to adoption, this study
investigates the influence of blockchain technology on microfinance cooperative lending. Blockchain
technology improves transparency with its immutable ledger and cuts transaction costs by as much as half,
according to a comprehensive literature study that used a qualitative methodology. According to regression
models, smart contracts are positively associated with reduced administrative overhead (p < 0.01), and
blockchain technology has the ability to automate loan processing and cut operating expenses. Microfinance
institutions (MFIs) have obstacles that prevent them from fully adopting the technology, such as unclear
regulations and a lack of technical knowledge. The study found that with the right regulations in place and
upgrades to the infrastructure, blockchain technology has the potential to revolutionize cooperative lending by
lowering the cost and increasing the efficiency of financial services. Investment in capacity-building programs
for MFI employees, the expansion of digital infrastructure, and the promotion of regulatory frameworks are all
suggestions.