The aim of this study is to investigate the factors that affect the performance of SMEs in Bench Maji, Sheka, and Kefa zone particular to manufacturing, trade and service sector. In this study, mixed research methods were used. Stratified simple random sampling was used to select proportional number of samples from the study area. Both primary and secondary source of data were used. To obtain the primary data, questionnaires were distributed for 278 micro and small sized enterprises owners and managers to access the performance status of their enterprises and also to examine factors affecting their performance. Secondary data were collected from books, journals, past research works, official documents and the Internet.