This study explored the effects of Tanzanian Private Universities Financing on university internal efficiency. Research activities were conducted in Tumaini University College (TUDARCO) in Kinondoni District in Dar es Salaam and Jordan University College (JUCO) in Morogoro municipal. A sample of 100 respondents including financial administrators, teaching staffs of both universities provided essential data. Survey research design was employed. Data were obtained through semi- structured interview, documentary review, questionnaires which included closed and open ended questions. The qualitative data gathered by the use of interviews, documentary review and open ended questions while the quantitative data were obtained through the use of closed ended questions. The findings indicated that, private universities in Tanzania are self financed through the collection of students’ tuition fees, fund rising, hiring of university premises and contributions from the university donors and acquaintances. The study noted that, the insufficiency fund linked to inadequacy personnel, lecture rooms, libraries, laboratories, hostels among others, these affect the university’s internal efficiency. Private universities should be given priority by government funding as they potentially contribute on social and economic development. The respective private academic institutions should seek to diversify their funding base through the variety of cost recovery measures such as rental of facilities charging of reasonable fees for services and contracting for professional consultation. Efforts must be made by private universities to upgrade salaries to enhance more academic benefits and staff retention