The objective of this paper is to assess the level of business informality and access to credit of Tanzania’s SMEs. The study considers business informality as a combination of improper keeping of business records, lack of business licenses, lack of business registration and lack of bank accounts. A sample of 295 SMEs and 4 commercial banks were randomly selected from Dar es Salaam, the business centre of Tanzania. The study found that improper keeping of business records was highly impacting SME’s access to credit, with other factors such as the lack of business licenses, business registration and bank accounts affecting the access to finance in the same order. The study findings reveal that on average, reasons related to business informality (lack of business registration, poor record-keeping and lack of business license) contributed significantly to difficult access to finance for SMEs compared to other reasons such as the lack of collateral and business plan. In this regard, interventions to increase the levels of formality in the SME sector would have a positive impact on the sector being able to access finance. This can be done through compulsory registration of SMEs at minimal or no cost.