A Thesis Submitted to Mzumbe University, Dar es Salaam Campus College in Partial Fulfillment of the Requirements for the Award of the Degree of Master of Business Administration (MBA - CM) of Mzumbe University.This research was done in Morogoro region and respondents (450) participated. The general objective was to investigate issues that Influencing effective participation of SMEs in socio-economic developments. Specific objectives were: To identify issues influencing SMEs Sustainability, to determine the extent macroeconomics factors affect SMEs in Tanzania and to assess the extent issues which Influencing SMEs have been tackled to ensure SMEs Sustainability. Case study design was used are interviews, observations and documentary review methods were used during data collection. Findings indicated issues which Influence SMEs sustainability were organization specific and system specific. Non microeconomic issues which affect SMEs sustainability include: Lack of corporate governance structure, finance, human resource, marketing, research and development, technology and corporate management. The research indicated that SMEs have been getting human resource support from the NGOs. Research indicated that the biggest problems for small firms was recruiting, motivating, and retaining employees. It was revealed from the study that today in many large firms also, the HR dimensions have been overlooked as it does not contribute in quantifiable terms. It was also revealed from the study that training also aimed at providing entrepreneurs in different SMEs skills and knowledge and that to a great extent solved the problem of human resources. It was revealed from the study that among efforts/measure used to overcome market problem included the formation of enterprise cluster to participate market competition and regional marketing. Research findings indicated that the practice of cluster marketing resulted into overcoming the problems of slow information delivery, over high management cost and slow response to market demand. It was revealed from the study that for developing countries it is essential for government to increase subsidies in terms of research and development support in order to gain