Garomsa, Abreham2018-06-202023-11-082018-06-202023-11-082017-01http://etd.aau.edu.et/handle/123456789/2288Microfinance institutions in Ethiopia are playing an important role in poverty reduction strategies initiated by the government of Ethiopia. These institutions have a mission of creating and facilitating credit and other financial schemes to enhance self-employment opportunities and poverty reduction. To address the main objectives of the study, four Microfinances were selected for the study purpose. The study was aimed at identifying and analyzing the potential factors that affects repayment performance of micro and small scale enterprises and individual entrepreneur borrowers using the structured questionnaires, semi-structured interviews and focus group discussions. Accordingly, in order to achieve this objective 319 sample borrowers were selected from the total of 2910 borrowers served by those selected MFIs. The descriptive statistics analysis and probit regression model was employed to estimate the model and analyze the results of findings. The result shows that ten variables including constant: sex, income from other sources, monitoring utilizations of other members in a group, credit timeliness, repayment time suitability, repayment trend on monthly basis and training adequacy are found significant and positively influence loan repayment performance of borrower. While loan utilization for the intended purpose, repayment trend on irregular basis and visit & follow-up on irregular basis was found negatively influence the repayment performance of borrowers. The extensive involvement and interference of third parties on the decisions of loan approval processing to lending institute were found as a contribution for high defaulting. Thus, it is recommended that the lending institutes needs to focus on monitoring loan utilization systems of borrowers and technical support needs of the target borrowers through delivering better awareness creation to organize the more viable borrowers, close supervision and follow-ups and strengthening their internal and external weaknesses though better integration with key partner stakeholders. Key words: Microfinance, loan repayment, loan utilization, integration, stakeholdersen-USMicrofinance; loan repayment; loan utilization; integration; stakeholdersThesis