Know Your Customer (KYC) procedure is a financial compliance pillar but is cumbersome, repetitive, and expensive to a microfinance institution (MFIs), which is usually running on fewer resources. The current paper introduces a blockchain-based electronic KYC (e-KYC) system that will resolve these issues by decentralizing it, making it auditable and using identity management that does not rely on privacy. The suggested system combines a permissioned blockchain network with smart contracts to issue credentials, verify them, and revoke them, credential storage is off-chain and encrypted, and personal identifiable information (PII) is stored in off-chain encrypted storage. In order to promote their privacy, the framework utilizes selective disclosure and zero-knowledge proofs (ZKPs) which allow customers to verify their attributes without providing all personal information. An experimental assessment with synthetic MFI workloads shows that it is more accurate (98.7%), less duplicative and latency is kept below 800 ms with peak loads. Up to 85% privacy was minimized in comparison to a centralized e-KYC model. The results affirm that e-KYC powered by blockchain can provide an affordable, secure, and scalable channel that enables MFIs to simplify the compliance process and ensure the safety of confidential customer information.