The MV Nyerere ferry overturned near the shore between the islands of Ukara and Bugolora.
It is thought the overloaded vessel tipped over when crowds on board moved to one side as it docked.
Local media say the ferry's official capacity was 100 people but officials say the vessel was carrying more than 400 passengers when it capsizedThe BBC's Aboubakar Famau in Tanzania says fear has gripped residents of Mwanza region as they await to hear the fate of relatives who travelled on MV Nyerere on Thursday.
"I received a call telling me that I have lost my aunt, father and my younger brother," says Editha Josephat Magesa, a local resident.
"We are really saddened and urge the government to provide a new ferry because the old one was small and the population is big."
Our reporter says the ferry's engines were recently replaced after local MP Joseph Mkundi complained about the previous ones.Mwanza Regional Commissioner John Mongella said that 42 more deaths had been confirmed on Friday, after 44 on Thursday.
He says 37 people have been rescued and are in critical condition. This is lower than the 100 rescues initially reported by local officials on Thursday.Tragic history
Tanzania has seen a number of nautical disasters, with overcrowding often playing a role.
In 2012, at least 145 people died when a packed ferry sank while transporting people to the island of Zanzibar in the Indian Ocean.
The year before, almost 200 people died in another major incident off the coast of Zanzibar. Hundreds survived, some found clinging to mattresses and fridges.
In 1996, more than 800 people died when the MV Bukoba capsized on Lake Victoria. It was one of the the worst ferry disasters of the last century
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