The objective of the study is to empirically examine the quantitative effect of credit riskrnmanagement on the profitability of Microfinance Institutions in Addis Ababa. The study hasrnchosen the ROE and ROA as the proxies for profitability. Whereas, the traditional credit riskrnratios indicators which are Total Loan to Total Assets (TLTA), Total Loan to Total Depositrn(TLTD) and Non- Performing Loan to Total Loan (NPLTL) are used as independent variables tornmeasure the amount of credit level of the MFIs. This was done by collecting data from 8 MFIsrnoperated in Addis Ababa and their annual report for the period from 2009 to 2018 which wasrnpublished by Association of Ethiopia Microfinance Institution (AEMFI). The data collected wasrnanalyzed with the aid of descriptive statistical techniques such as mean, maximum, minimum,rnand standard deviation. More so, multiple linear regressions were used to establish thernrelationship between study variables and to test the hypotheses using STATA software. The studyrnmade six hypotheses and two regression tests for the two independent variables, ROE and ROA.rnKey findings from the study confirmed that, Non- Performing Loan to Total Loan (NPLTL) ratiornhas negatively and significantly influences on both Return on Asset (ROA) and Return on Equityrn(ROE). Total Loan to Total Deposit (TLTD) ratio has negatively and significantly influences onrnprofitability of MFIs measured in terms of Return on Equity (ROE). The study further found thatrnTotal Loan to Total Asset (TLTA) ratio has positively and significantly influences on return onrnequity (ROE) while it positive but insignificant effect on return on asset (ROA). Based on thernstudy it is recommended that MFIs need to adopt a rigor credit risk management policy, developrntheir credit risk control capacity, and establish sound and competent credit risk managementrndepartment. Further research with large sample size and additional indicators of credit riskrnmanagement and performance is also an interesting expansion for this research.