Nowadays, governments and many development agents pay great attention to therndevelopment and enhancement of Microfinance Institutions (MFIs) anticipating that theyrnare the shortest way to end poverty. Many scholars and stakeholders also acknowledge thatrnMFIs are the possible panacea to under development but they stress on the properrnsupervision and regulation of these MFIs as they are mobilizing susceptible resources.rnHowever, evaluating the performance of MFIs is found to be among the most controversialrnissues throughout the world leave alone in countries like Ethiopia where the micro financingrnbusiness is at its infant age. Different researchers and practitioners found in different cornersrnof the world employ various kinds of approaches to scrutinize the performance of MFIs.rnIt is crucial for countries to measure the performance of their MFIs and identify the majorrndeterminants of their performance, at any cost, in order to see their relevance and prospectsrnprior to new policy developments, strategic planning and so on. Tlus paper, therefore, triedrnto give statistical insight in measuring the performance of MFIs in the country and therndeterminants of their performance. A cross-sectional data from the 2006 fiscal calendarrnbalance sheet of 26 MFIs is utilized to make the study. An effort is also made to observe therntrend of the industry with respect to some indicators by collecting time series data.rnConsequently, the factor analysis part of the study identified that Deposit mobilized fromrnclients, Number of Active Borrowers, and Gross Loan Portfolio load lugh on onerncomponent fortlling tl,e outreach performance dimension of tl,e MFIs in tl,e country. Onrnthe other hand, Profit Margin, OSS, Return on Asset and Gross Loan Portfolio to TotalrnAsset Ratio load lugh on the other component fortlung tl,e financial viability dimension ofrntl,e MFIs.rnThe factor scores also identified tllat ACSI and Ocssco are among tl,e best performingrnMPIs, whereas, Aggar and Metemamen are among the least performants in the country inrnevery dimension.rnIn order to identify the determinants of tl,e performance of tl,e MFIs, on the tworndimensions, a SUR model was fitted on the scores synthesized by tl,e factor analysisrnanticipating tl,e performances of outreach and sustainability of the MFIs are interrelated.rnHowever, tl,e Breusch Pagan test exposed tl,at tl,ere is no evidence to reject tl,e hypotllesis that the errors are not correlated across equations (0"12 = 0). Besides, the significant positiverncorrelation between outreach and sustainability performance dimensions approves that therernis no trade-off between the two dimensions in the case of our particular country MFIs.rnThe number/ types of financial services rendered, the number of staffs per branch and theirrncapital are found to determine the outreach performance of the MFIs in the country. It wasrnalso noted that capital has an adverse impact on the outreach efforts of the MFIs. Thernunregulated growth of capital has a negative impact on bodl outreach and sustainability ofrnd,e MFIs dlough it is not significant on the case of sustainability. MFIs in the country tendrnto focus on d,eir capital for weir loan-able funds rad,er dun on deposit mobilization.rnMoreover, d,e fmancial viability of We MFIs is found to be highly determined by the averagernamount of loans disbursed to individuals, the fll1ancial revenue ratio and d,e cost perrnborrower ratio. The signs of these determinants agree to the expect,~tions set on the study.rnTo the surprise of d,e author, d,e number of branches that MFIs have is found not to affectrnthe performance of the MFIs contrary to d,e expectation set. Intrinsically, one expects WatrnWe number of branches that d,e MFIs have affects d,e outreach and sustain abilityrnperformance of the MFIs significandy, but Wat is not We case in this particular study.