Studies have shown that good corporate governance (CG) have led to significant increases inrneconomic value added of firms, higher productivity, and lower risk of systemic financial failuresrnfor countries. On top of this the purpose of this study is to analyze effects of corporaterngovernance mechanisms on the performance of Ethiopian MFIs. From the total of 34 MFIsrnwhich are operating in the country, five MFIs have been selected for the study by way of arnpurposive sampling technique and six corporate governance variables (board size, educationalrnqualification of boards, audit committee size, board gender diversity, business managementrnexperience of boards and industry specific experience of boards) have been used for the study.rnOn the other hand, financial performance was measured using two variables (return on assetrnand return on equity). The study also used leverage, growth and capital adequacy ratio of MFIsrnas control variables. The effect of CG examined by using panel data from year 2005 to year 2014rngathered from the audited financial statements of five sample MFIs and the study usedrnquantitative research approach. Secondary financial data were analyzed by using multiple linearrnregression models for two profitability measures (ROE and ROA).The empirical result showsrnboard size, gender diversity and size of audit committee have negative and significantrnrelationship with performance of MFIs while industry specific experience and educationalrnqualification of the board have positive relationship; and the effect of business managementrnexperience of directors on performance is inconclusive. Based on the result of the study, it isrnrecommended that board and audit committee sizes should be kept low. Gender diversity of thernboard should also be maintained and attention should be given for the capacity development ofrnwomen.rnKeywords: Corporate Governance Mechanisms, Agency Theory, Financial Performance, MFIs