The major challenge facing many developing countries, especially in Africa, is devising appropriate development strategies that will capture the financial services requirements of Small and Medium Enterprises (SMEs) which constitute about 70 percent of the business sector. Delivery of microcredit to operators of Medium Small and Micro Enterprises (MSMEs) in developing countries is increasingly being viewed as a strategic means of assisting the working poor. Over the past decades, a considerable amount of multiand bilateral aid has been channeled into microfinance programs in Uganda with varying degrees of success. Like all development interventions evaluations and impact assessment studies to ascertain the achievements and failures of these programs would help a lot for future program design. In Uganda, the SMEs sub-sector has realized tremendous growth in terms of employment, income and business stock size. The sub-sector has therefore attracted great attention of financial service providers to extend a range of financial offer to the poor. However, little is still known of the contribution of the microfinance industry to the growth of the SME subsector. The study sought to establish the impact of microfinance service delivery on the growth of SMEs in eastern Uganda. The study employed both quantitative and qualitative data analytical methods, and a multiple regression was run to estimate the effect of socioeconomic characteristics on the SMEs growth, while a logit model was used to assess the constraints to access to microfinance products in Uganda. The findings indicate that although the MFIs have performed below a set standard on average due to some industry wide challenges, they have had a significant impact in linking SMEs and the poor to sources of credit and contributed to their growth in terms of growth of business capital and stock accumulation. It is recommended that there is need for an institutionalized public-private partnership for creating favorable conditions for the operations of these enterprises. This will reduce on the numerous constraints facing SMEs so as to make the nationals benefit from their overall contribution to poverty reduction. Designed tailored made products of SMEs are essential through investment in education, setting up an authority or coordination center for SMEs and promotion of prudential mechanisms by setting a regulatory and supervisory framework for all Microfinance Institutions.