Abstract The study aimed at examining the effect of working capital management practices on lending decisions in Micro finance institutions in Buea municipality. The specific objectives of the study were to establish the effect of cash, account receivable and account payable management practices on lending decisions in MFIs. Primary data was collected using structured questionnaires administered to managerial staff of 31 MFIs selected through purposive sampling technique. The analysis of the results established that cash management practices and account receivable management practices have positive effects on MFI’s lending decisions. On the other hand account payable management practices showed no significant effect on lending decisions. KEY WORDS: Working capital management, Working capital management practices, Lending decisions, Microfinance Institutions.