Abstract: Community cereal banks have long been acknowledged to have the potential for improving food security in food-deficit areas of Africa. However, the evaluation of their performance reveals that these institutions are not viable in every context. Drawing on the experiences from the food-deficit areas of Kongwa and Chamwino Districts in the semi-arid Tanzania, this paper examines the extent to which the cereal banks have contributed in improving food security in these areas. Data pertaining to villagers’ views on the performance of the banks were collected through household surveys, in-depth interviews and focus group discussions in three villages of Banyibanyi, Manchali and Makoja. The findings revealed that contrary to the expectations of improving food security the performance of the cereal banks was dismal. The poor performance is largely attributed to inadequate deposits of cereals, stock decapitalization caused by delays and non-payment of loans, lack of business acumen on the part of the leaders and attitudes of members towards donor assistance. Lessons learnt from the operation of the banks have shown that strategies to address the problem of food insecurity should be demand rather than supply-driven. This is important for ensuring commitments towards the implementation and an overall sustainability of the course. Furthermore, community cereal banks in food-deficit areas that operate as a service to the rural poor have very limited chances of succeeding unless they also adopt a business approach.