The study aimed at lending policy and its impact on financial performance of microfinance institutions in uganda. a case of pride microfinance Katwe branch. The study utilized a mixed-methods research design, integrating both qualitative and quantitative techniques. This approach allowed for a holistic exploration of the topic by capturing both the depth of individual experiences and perceptions (qualitative) and the breadth of trends and patterns in numerical data (quantitative). The Pride Microfinance Katwe Branch was chosen as the primary case study location due to its significance within the microfinance landscape of Uganda. The selection criteria included the branch's prominence, geographical representation, and relevance to the broader economic diversity observed in the Katwe area. The findings of the study shown the relationship between lending policy and financial performance (dependent variable). It shown that through bivariate means, the correlation between lending policy and financial performance was (r) = 0.541. This implied that there was a moderate positive relationship between the two variables since the significant value lending policy results into a corresponding positive change in financial performance in Pride Microfinance and vice versa. There is a need to emphasize the lending policies already in place to ensure that every employee of the MFI is obliged to adhere to them. This can be achieved through continuous training of staff, putting in place reward policies to those who work within the limits of the policies but without compromising creativity and innovation of the staff.