Despite the importance of financial information on access to credit, growth and sustainability, Micro and Small Businesses (MSBs) in Tanzania hardly keep records. This descriptive study investigated financial record keeping practices in MSBs in Iringa and Kinondoni Municipalities employing a sample of 245 owner managers. Data were collected using a questionnaire. Findings indicated that financial record keeping in MSBs remains a big challenge. Some MSBs occasionally kept records while others did not keep records at all. The most kept records were inventories and purchases rather than sales. Reasons for not keeping records included limited knowledge on the value of record keeping, limited skills, shortage of time, shortage of funds to hire skilled personnel and shortage of facilities such as tables/desks and cabinets to store records. The study established a significant association between record keeping and the performance of MSBs. Yet there were mixed perceptions of MSB owner managers regarding the value of record keeping. The study recommends policy action to enforce financial record keeping and strengthen Business Development Services (BDS) provision. Further studies may consider an experimental design with MSBs in the treatment arm supported to keep financial records, then measure impact over a certain period.