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The main goal of every microfinance institution (MFI) is to operate profitably in order to maintain its stability and improve growth and sustainability. However, existence of high levels of loan delinquency problem in microfinance industry negatively affect the level of private investment and constrain the scope of microfinance institution credit to borrowers as MFIs have to compensate for loan delinquency losses. The success of individual MFIs in credit risk management is largely reflected in the proportion of delinquency’s loans to gross lending. External and internal economic environments are viewed as critical drivers of loan delinquency occurrence. In this regard, this empirical analysis investigates on external factors, MFIs and self help groups’ (SHGs) specific factors, to establish which of these factors significantly affects loan delinquency performance in MFIs in Kenya. The study used primary data. The study target population comprised 49 MFIs registered by Association of Microfinance Institutions of Kenya (AMFIK). A survey research design was used and a census of the 49 MFIs was taken. The data was collected through a self developed structured questionnaire and administered to MFIs loan officers for response. Multiple regression analysis was used to establish relationship between loan delinquency and microfinance institutions, self help groups and external factors in MFIs in Kenya. The estimated regression coefficients and tvalues were interpreted. The study found evidence that there exist a positive and significant (β= 9.937, t-value 5.016) relationship between loan delinquency and microfinance institutions specific factor. In addition self help groups specific factor was found positive and significantly (β= 6.090, tvalue 3.097) related to loan delinquency. Further external factor was found positive and significantly (β = 2.549, t-value 2.069) related to loan delinquency performance in microfinance institutions in Kenya. These results support Dinos & Ashta (2010) and Saloner (2007) findings. The study concludes that microfinance institutions and self help groups’ specific factors and external factors significantly affect loan delinquency performance among microfinance institutions in Kenya. The study recommends that MFIs portfolios management strategies focus more on the internal causes of delinquency which they have more control over and seek practical and achievable solutions to redress delinquency problems.