A Dissertation to be submitted in Partial Fulfilment of the Requirements for the Degree of Master of Business Administration of Mzumbe UniversityThis study aimed at investigating determinants of SMEs loan defaults and their impacts to commercial banks in Tanzania using CRDB as a case study. The study was guided by five objectives which were (1) to investigate how the factors that cause SMEs to default loan repayment affect CRDB bank, (2) to identify factors that hinder SMEs to repay back their loan to CRDB,(3) to assess how CRDB bank respond towards the defaulted loan from SMEs,(4)to find out how SMES loan default affect CRDB bank and (4) to investigate problems encountered by SMEs when they fail to make loan repayment.. The research design was both quantitative and qualitative. The study used questionnaires and observation methods for collecting data which were then entered in SPSS software for analysis. The study involved total of 150 respondents as sample size. According to literatures loan defaults occurs due to the character of the borrowers, high interest rates from the lending institutions, marital status and business failures. The findings from this study revealed that deaths and prolonged illness of the borrowers, changes in political regimes, character of the SMEs and business failures to be the main factors behind SMEs loan defaults in Tanzania. The study recommends CRDB bank to visit the premises of the borrowers, develop a relationship with SMEs and conduct a proper monitoring control. The study recommended CRDB to use Credit Reference Bureau (CRB) in order to facilitate collection of loans.