A Dissertation Submitted to Mzumbe University, Dar es Salaam Campus College in Partial Fulfillment of the Requirements for the Award of Master’s Degree of Business Administration in Corporate Management.This study presents the assessment on challenges towards financing SMEs in Tanzania especially at SIDO in Tanga Region. Specifically, the study examined the causes lead to poor financing of SMEs in Tanzania; assessed whether there is support of SMEs especially by SIDO; and recommended and suggested on challenges towards financing SMEs especially from SIDO The study covered all the 85 respondents at SIDO in Tanga Region. Primary data was collected using structured questionnaires administered to staffs, management and members. Data was analyzed by the use of quantitative and qualitative methods, which included the use of descriptive statistics. The study found that, the most of respondents who are active member of SIDO, have argued; the loans they received from SIDO make growth of their businesses. They also argued that; after receiving loans SMEs businesses have grown and they are still growing as they increase their working capital compared with time before they received loans from SIDO. Also, some of the respondents argued that; they are businesses failed due to lack of business education, sickness, family problems, theft and misuse of loan which make their business remained the same. And most of the respondents agreed that, the challenges towards financing SMEs are failure of SMEs to repay their loans, unproductive activity and lack of business education, Moreover, this study recommended that, clients who are the main clients of SIDO and many of them have big amount of loans, should collect loans individually than in group because of heavy burdens they get from clients who fails to repay their loans and especially those with large amounts of loan or clients with big amount of loan.