In recent years, blockchain technology has emerged as a revolutionary tool with the potential to reshape financial systems across the globe. For commercial banks, the integration of blockchain offers a strategic advantage in facilitating transparent, secure, and efficient financing for small and medium enterprises (SMEs). This paper explores the dual role of blockchain as both an enabler of financial inclusion and a mechanism for improving trust in lending transactions. By examining current applications, opportunities, and obstacles, the study highlights how blockchain can reduce operational costs, eliminate information asymmetries, and improve risk assessment processes. Nonetheless, the adoption of blockchain in SME financing is not without challenges, including regulatory uncertainties, technological barriers, and cybersecurity concerns. The paper concludes with targeted recommendations for policymakers and banking institutions to promote blockchain adoption in a secure and inclusive manner..

Blockchain, SMEs, Commercial Banks, Transparent Financing, FinTech, Smart Contracts, Financial Inclusion, Risk Assessment, Regulatory Challenges, Digital Transformation.

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