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ce services are confirmed to be stationed in urban areas which make many SMEs resides in rural remote areas of face the problem to access the service due to the poor economic conditions, poor infrastructure, dealing with complicated formalization procedures, harassment of traveling many times for searching the services, these limitations make the SMEs not to grow due to the luck of sufficient working capital to meet their needs.

Conclusionand Recommendations
Conclusion

To a large extent MFIs operation in Tanzania has brought about positive changes in the standard of living of people who access their services. Although some of the clients have not benefited, most MFIs clients have benefited positively. Despite the achievements of MFIs clients, most of them complained that, the interest rates charged by MFIs were very high.

The findings reveal that the process of application for loans starts with small amount and after repayment the client can apply for next higher amount. This process was observed to be a limiting factor for those customers who needed a large amount right from the beginning. This is true because it takes an unnecessarily long time for those seeking a large loan to obtain enough funds to meet their needs. In addition to the time taken to receive large loans, the clients also raised concerns about the time frame from the receipt of the loan to the time of starting repayment, which is just one week after the disbursement of funds in most cases.

The surveyed MFIs conducted a pre-lending training programme, but it was further observed that, the training was provided by loan officers who were not experts or practitioners in the area of small business. The training concentrated more on familiarising the clients with loan terms and conditions rather than providing small business skills. This practice may build up the spirit of loan repayment but does not influence business growth.

Generally, all SMEs operating in Tanzania are facing a number cultural, socio economic and operational barriers in relation to microfinance services that limit that ability and capacity to grow. In addition SMEs in different stages face other unique challenges to grow and from those who are already running SME the main challenges are limited access to quality and affordable microfinance services, access to term finance and sufficing working capital to meet their needs.

Recommendations
The following recommendations are put forward in order to improve operations of MFIs.

1. The interest rate should be lowered to a level that would cover MFIs' operating expenses and at the same time facilitate the growth of their clients' business.

2. MFIs should consider the possibility of increasing the grace period and reducing the frequency of repayment so as to provide for clients with long term loans turn to businesses such as farming.

3. The poor state of the infrastructure, especially rural roads, was pointed out as the main reason why MFIs fail to operate in rural areas. In addition to improvement of infrastructure the Government of Tanzania, in collaboration with MFIs, should introduce trade exhibitions to their micro and small businesses in order to expand the SMEs' market coverage.

4. MFIs should restructure their training contents to include improving their clients' business skills. They should org