The accessibility of a good financial service is considered as one of the engines of economic development and the instruments to break the vicious circle of poverty. The aim of this study was to analyze determinants of credit use and loan repayment performance of smallholder farmers in Mana woreda. As a specific objective, this study assessed determinants of credit use, purpose of loan and factors affecting loan repayment performance in the study area. Purposive sampling technique was used to select both Jimma Zone and Mana woreda. For this study a total of 95 households were selected randomly followed by PPS from two kebeles’. Both primary and secondary data were collected for this study. Primary data were collected by interview schedule of sample respondents; whereas, secondary data were also collected from published and unpublished documents. Both descriptive and inferential statistics were also used to analyze the collected data. Regression model was used to reveal the effect of different variables on Credit use. From our sample 44.2 % households were found to be credit user from formal financial institutions whereas, 55.8% of them were found to be credit non user. Number of livestock, land size, age and participation of nonfarm activity were found to be significant at less than 5% probability level on credit user. Accordingly,42.9 percent,21.4 percent, 2.4 percent, 21.4 percent and 11.9 percent of household borrowed money for the purpose of purchase of inputs, purchase of livestock , purchase of household goods, for social ceremony and for other household expense respectively. From 42 credit user 29(69%) were non-defaulter 13(31%) households were defaulters. Age, land size, livestock (TLU), experience of credit use, purpose of credit, participation of nonfarm activity, on farm income, social expenditure, training and educational level was significant at p<0.1.To increase credit user facilitation on experience sharing and selective training to younger households is essential and for improve loan repayment performance, training and support should be given to the community to reduce expenditure on ceremonies as much as possible, farmers should invest the borrowed funds for productive purposes and financial institution should give training related to saving and credit in general and repayment performance in particular before lending. Key words: Determinants, credit, smallholder farmer, loan, binary logit, performance

Keywords: Determinants, credit, smallholder farmer, loan, binary logit, performance