The study aimed at micro finance services and development of small and medium businesses and it was guided by the following objectives; To evaluate the different services offered by micro finance institutions and their performance on small and medium enterprises in Nansana Municipality, to identify the credit procedures used by MFIs to extend their services to SMEs in Nansana Municipality and to examine the challenges and hindrances faced by small businesses in accessing and maintaining of the small loans. The target population under the survey was the registered SMEs. Within Nansana Municipality. There are over 500 registered SMEs. For the purpose of this study, only Business that have operated for more than two years were considered as in my opinion this was possible to reasonably test the contribution of Micro credit on firm growth. According to the findings, 90(45.0%) respondents strongly agreed and 90(45.0%) respondents agreed respectively that MFIs carry out identification checks on all borrowing customers before disbursement of the loan to their clients. 10(5.0%) respondents were not sure as to whether MFIs carry out identification checks and 10(5.0%) respondents disagreed with the statement. Further, the results shown that 95(47.5%) respondents strongly agreed that Banking officials make a visit to clients' home and business premises before extending the loan to them. 90(45.0%) agreed, 10(5.0%) were not sure, 5(2.5%) disagreed respectively and none of the respondents strongly disagreed to the statement. The Government should encourage investors to set up more Micro Finance Institutions in Rural areas so as to bring financial services nearer to small businesses. Most of the micro and small Enterprises rely on Micro Finance Institutions for working capital to uplift and grow their business. The MFIs should design its loan products in a manner that would enhance the overall business operations of the small business enterprises for greater economic impact.