Research Report submitted in partial fulfillment of the requirements of the Master’s degree of Business Administration of Mzumbe UniversityThe study mainly assesses the effectiveness of group lending mechanisms to women entrepreneurs in Micro-financial Institutions in Tanzania. The study interviewed 120 respondents using the questionnaires, interviews and reviews of documents. The study found that PRIDE Tanzania used ways/techniques of two categories, the promotion techniques and organizational techniques to attract clients. The promotion techniques included using colleagues; using local leaders; and mass/social media. The organizational techniques included loan size; training; and favorable policy. The study also found that PRIDE helped the borrowers to have loans at number of times to invest in their businesses. It was found that the amount of loans increased as the borrowers repaid the loans. The study also found that the lending groups of PRIDE were faced by a number of challenges. These challenges included the untrustworthy among the group members; low education among the group members; family errands; low technology; and competition. The study concludes that there are ways that are employed by PRIDE to attract clients to join the lending groups. These ways are promotional and organizational techniques. The study also concludes that the loans given by PRIDE were important in the expanding and improving the well-being of the borrowers. The loans made the investment capital grow, increase employment opportunities, and the amount of loans give to increase in amount. The study also concludes that there are a number of challenges facing the group lenders in PRIDE. These challenges include untrustworthy among the members; low education, low technology; family problems and competition.