In Ethiopia the institutionalized microfinance industry is a relatively a newrnphenomena and development. It was formally legalized in June 1996 under thernproclamation 40/ 1996 and to date, the industry has grown to service somern721,100 clients (based on data made available at the end of June 2003) with anrnestimated national market penetration of 7% . The industry continues to develop,rnevolve and face many new challenges in a market that is currently supply -driven.rnHowever, as the marketplace develops the microfinance institution (MFI) willrnincreasingly need to identify customers' needs, aspirations and demands, if itrnwishes to achieve sustainability. Indeed, some MFLs are already attentivelyrnbeginning to explore the need of customers, for example, develop new products tornmeet changing market needs .rnFor this project, even through there are several research methodologies, but in therncurrent circumstance and considering the nature of the topic under review, it wasrnconsidered appropriate to use exploratory research technique. This approach wouldrnallow defining the parameter and the background in which marketing exists,rnenabling to uncover the salient points that are relevant and to a fuller understandingrnof the environment. because of the complex nature of the subject, it was also feltrnthat individual interviews would provide a greater depth and richness ofrninformation than if alternative methods were used e.g. postal questionnaires .rnFinally, structured questionnaires, for senior officials, and operation employeesrnof selected MFIs were used to ensure consistency throughout the program, using arnvariety of open and closed questions.rnThe research findings , detailed in this study, are based, where appropriate, on thernresponses to the interview and the main issues raised by the MFIs together with arnnumber of examples that interviewees have highlighted . The interviews werernanalyzed under each of the major set of marketing criteria.rnThe microfinance industry is service-oriented industry, in exchange for a feern(interest rate), the customers either borrow or lend money from or to the MFI. Ifrnthe customers are satisfied with these services, they will continue to use them andrnthus the ultimate success of the MFI business depends on its ability to service therncustomers' needs, wants and demands.rnLargely, for MFIs, marketing is about understanding the customer and how to retainrntheir business. This simply means that the MFI needs to focus on defining its targetrnmarkets, its market share and its size in its chosen market place. MFI then needs tornclearly identify if its product line effective meets the perceived needs of its currentrnand poetical customers.rnMarketing includes the entire element motioned above, as well as a number ofrnothers and they all fall under the marketing planning process. The final outcome isrndocumented in strategic marketing plan. In strategic marketing plan, one wouldrnexpect to clearly identify the organization's objectives' resources, timing andrnresponsibilities.rnFor the purpose of this exercise, the possible barriers to entry into thernmarket place were ignored. Indeed those that may exist are relatively low. Allrnpotential sponsors of MFIs are free to enter into the marketplace. The minimumrncapital investment requirement is 200,000 birr (23,255 USD) and current legislationrnpreventing forging capital owners from investing directly in MFIs are alsornimportant and additional barriers. However, to date, none of these barriers havernbeen shown to be of any real significance.