In developing country like in Ethiopian poverty and unemployment is a major problem .in Ethiopian there are many poor people living in this problem. Hence, the availability of financial service play an important role in creating self-employment and job opportunity, the revolving fund is one of the mechanisms to support but according to the reports Addis Ababa small and medium enterprise development office the repayment performance of youth revolving fund program is not good hence, this study determine the factors that influencing the performance youth revolving fund. In this study 144 beneficiaries or respondent were included descriptive and logit regression model were employed and 9 variable was used to econometric model the result shows that to make business effective, the availability of sufficient loan size is one important factor. In this research shows that the revolving loan fund is not sufficient to do all the business and also the borrowers did not have interested to repay the loan because one of reason is the , weak legal enforcement for defaulters, low supervision by the stakeholder and also some reason is cost of doing business is higher than the revenue and some demography factors such as age, educational level gender affect the performance of revolving fund and the study has found that the collateral used by the loan providers were found to be reasonable for the majority of the borrowers and there is absence of market survey and continuous training and supervision hence ,this is the factors of the performance of RLF and thus, in logit model results shows that preferred amount of loan, administration supervision, levels of education, market survey and age is positive and business form and gender is negative relationships with the RLF repayment performance and it is recommended that the government and relevant bodyâ€™s 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, screaming the borrower effectively, make a market survey before borrowing or starting the business ,close supervision and follow-ups and strengthening their internal and external weaknesses though better integration with key partner stakeholders.