A Dissertation Submitted in Partial Fulfilment of Requirements for the Degree of Masters in Business Administration-Corporate Management (MBA-CM) of Mzumbe UniversityThis study investigated the loan recovery and credit policy in microfinance institutions (MFIs) in Tanzania. Specifically, this relationship between the MFI’s loan recovery and her credit policy was explored using survey data from 30 clients randomly selected from FINCA Tanzania Magomeni Branch in Dar-es-Salaam Quantitative methods were employed to assess and analyze FINCA’s credit policy and Pearson Correlation Coefficient of Rank was used to analyze the relationship between the credit policy and the loan recovery. The study revealed that the majority of the clients served by MFIs are females. The age bracket of most of these clients was 31-40 years. Although the majority of the clients are married, there is a large group that is widowed. Furthermore, most of the clients of MFIs take short term loans mostly for business purposes. The study further revealed that the character and integrity of the clients is the major factor considered before these MFIs issue out loans. The study also revealed that these MFIs charge very high interest rate on credit while giving low credit time. On the positive note, the study found that there was a strong positive relationship between good credit policy and loan recovery The study recommends that MFIs review the methods of extending their services so as to better service recovery. Also, there is need for market research by MFIs so as to come up with new products to cover new clients such as those in the agricultural sector. Lastly, the MFIs need to better train and empower their loan officers in order to improve on service delivery.