A Dissertation Submitted to Mzumbe University Dar-Es-Salaam Campus College in Fulfillment of the Requirements for the Award of Master’s Degree of Business Adminstration Corporate Management of Mzumbe University 2013The fundamental objective of this study was to assess the contribution of bank loans on Small and Medium Enterprises (SMEs) in Tanzania, more specifically the study had three objectives; (1) To identify the challenges facing SMEs in accessing National Bank of Commerce loans; (2) To study SMEs utilization of loans provided by NBC; and (3) To study performance of SMEs after accessing NBC loans. Both quantitative and qualitative research approach were used in this study, where simple random sampling technique was employed in selecting the 30 SMEs and 20 NBC staffs that constituted the sample size of the research study. The sources of materials for the study were both primary and secondary. Primary data were collected by the use of structured questionnaires which were designed and administered to SME customers and employees of the company alike. Stakeholders like SME customers, management executives and staff of NBC Bank were interviewed for input on this study. Secondary materials were extracted from relevant textbooks, newspapers, reports/articles, journals, bulletins and documents presented by corporate financial analysts and policy planners. The findings of the study reveal that significant number of the SMEs benefitted from the loans even though only few of them were capable enough to secure the required amount needed. Interestingly, majority of the SMEs acknowledge positive contributions of loans towards increasing their returns and sales thus placing them in the competitive arena. It is recommended that Banks should review their interest rate downwards and also share best practices with their SME customers especially on the efficient use of loans; this will boost their productivity and support SMEs in Tanzania.