This study investigated microfinance institutions’ services and the financial performance of micro and small-scale enterprises in St.Balikuddembe Market. Its objectives were to investigate whether loans disbursement, savings mobilization and financial literacy influenced the level of financial performance of micro and small-scale enterprises in St. Balikuddembe Market. The study adopted a cross-sectional survey design, using both qualitative and quantitative study approaches such as questionnaires, interviews and observations, to collect data from a sample of 164 respondents in accordance with Krejcie and Morgan table. The analysis of data — done with the help of statistical analysis programme - SPSS (Statistical Package for Social Scientists) and a Pearson Correlation Coefficient — revealed that loan disbursement and financial perfomance of micro and small-scale enterprises were positively related at Pearson correlation coefficient of 0.345 at significance level .000 which was below 0.01 the critical level of significant. It was also revealed that savings mobilization promoted the financial perfomance of micro and small-scale enterprises at Pearson correlation coefficient of 0.458 at 0 .000 value of significance.

Financial literacy also influenced financial perfomance of micro and small-scale enterprises at Pearson correlation of 0.258 at 0.001 value of significance. Therefore, the study recommends that microfinance institutions should conduct regular training programmes for micro and small-scale 46 enterpreneurs in order for these groups to acquire financial knowledge and skills useful in business and credit management of their businesses in order to ensure profitability and sustainability.