The study examined the influence of financial monitoring on the performance of SMEs in Tanzania. The study was guided by resource- based theory. Cross-sectional research design and quantitative research approach were used in the study. Structured questionnaire was used to collect data from a sample of 204 SMEs in Arusha City Council. The regression analysis of data established that, financial monitoring in SMEs results in significant increase in sales revenue, profits, product lines and number of customers. The findings provide an indication that, financial monitoring is critical in ensuring positive performance of small and medium enterprises. Hence, owner-managers should capitalize in managing business finances and make close monitoring on all financial matters for the improved performance of their ventures. Similarly, the policy makers and training institutions need to have a well- established framework to assist SMEs on matters related financial monitoring and provide relevant trainings on key features of financial monitoring for improved performance of SMEs.
Keywords: Performance, Small and Medium Enterprises, financial monitoring
