Demand for credit to finance micro enterprises is increasing throughout the world especially in least developed countries including Tanzania. Many entrepreneurs are emerging nowadays in different areas of the country especially Dar es Salaam, Kilimanjaro, Arusha, Mbeya, and Mwanza. So far, small enterprises have become the main source of income to many peoples in the country. Apart from the efforts made to the financial institutions, there is little empirical evidence to show that, the performance of micro enterprises is influenced by credit provided by different Micro-Finance Institutions (MFIs), and this was the core of this research. Primary data were collected using structured questionnaire, and analysed using SPSS. Results indicate that, enterprises which acquired credit get higher gross profit than their counterparts which did not access credit. From the findings it is concluded that, provision of credits to small enterprises has a significant effect in performance of SMEs. It is further suggested that tax reduction, review off economic policies on SMEs and provision of business knowledge and skills would improve the performance of micro enterprises in the country.