This research project aimed to evaluate the impact of financial institutions on the performance of small businesses operating within Nansana Municipality, Uganda. Financial institutions such as commercial banks, microfinance deposit-taking institutions, and SACCOs play a pivotal role in facilitating access to capital that small enterprises rely on to grow and expand. However, the contribution of these financial organizations towards supporting small businesses in Uganda had rarely been empirically established. As such, the study sought to examine the major financial institutions active in Nansana Municipality and analyze their effect on key performance metrics including sales volumes, profits, employment levels, and loan repayment abilities of small businesses over a five-year period. Both primary and secondary data were utilized. Extensive reviews were conducted of the financial statements and annual reports of small businesses in the municipality for the time span under research. Surveys and interviews were also carried out with business owners and financial institution managers. Quantitative methods including comparative analysis and regression models were employed to test for statistically significant relationships between financing activities and enterprise performance before and after accessing funds. Qualitative insights from interviews aided in contextualizing the quantitative results. From the findings, a p-value = 0.092 which appeared to be more than 5% level of significance, an indication that budgeting literacy among MSEs positively (Beta=0.089) predicts and affects their financial performance of these enterprises. However, its effect was insignificant at p-value > 0.05. Higher loan disbursements, longer repayment periods, and customized financial products tailored to the needs of small firms were found to enhance business performance. The study concluded that with strengthened support from financial organizations, small enterprises could realize their full potential and substantially contribute to socioeconomic development at the local level.