ABSTRACT
The microfinance sector has played a significant role in economic development and financial inclusion in Tanzania. Nonetheless, with the COVID-19 pandemic distressing economic activities, microfinance institutions (MFIs) were impacted adversely.  Despite significant progress by MFIs in Tanzania, literature suggests that MFIs still lacks experiences in weathering impact of COVID-19 pandemic (CGAP, 2021). The crisis has placed long-lasting inequalities in societies including the precarious access that the poorest have to financial services. This led to significant pressure on numerous MFIs and their clients, and it is ongoing. Consequently, the sector should take indispensable steps now to prepare for that eventuality. In this view, the study assesses the impact of COVID-19 on MFIs with reference to those stationed in Dar es Salaam. As With the Pandemic came a wave of deaths, economic depressions and a need for financial help all over the world. The specific objectives were to assess the impact of operational costs on MFIs in Dar es Salaam and assessed impact of financial adequacy on MFIs in Dar es Salaam. The study applied descriptive research design. The population was 100 MFIs personnel in Dar es Salaam given that it's the hub of business, numerous firms are located there. Primary data were used for analysis using SPSS, to describe the relationship between the study variables. In conclusion, the findings of this paper show COVID–19 have significantly harmed the performance of MFIs. Meanwhile, the results also show that both financial capability and operational stability have positive and significant relationship toward MFIs.