Microfinance institutions (MFIs) have emerged as significant players in supporting female entrepreneurs' economic activities across urban Tanzania. The research employs a qualitative approach involving semi-structured interviews with 30 female entrepreneurs who have received MFI services, conducted over a period of six months. Findings indicate that MFIs offer financial support to 85% of the interviewed entrepreneurs, which is crucial for their business sustainability. However, challenges such as high interest rates and bureaucratic processes continue to hinder their full potential. MFIs play a pivotal role in supporting female entrepreneurship in Tanzania's urban areas by providing necessary funding; however, improvements are needed to address operational hurdles. Recommendation for policy makers is to reduce MFIs' interest rates and streamline administrative procedures to increase the effectiveness of support provided to female entrepreneurs.