This study examines the capital structure determinants of Microfinance Institutions (MFIs) operating in the Somali Region of Ethiopia. Capital structure - the strategic balance between debt and equity financing - represents a critical decision for MFIs seeking to maintain financial sustainability while serving low-income populations in this challenging region. The research adopts a quantitative approach, analyzing financial data from 5 MFIs in Somali Region over the period 2015-2024. Secondary data was collected from the samples 5 MFI’s financial statements over the ten year period. Seven key determinants were investigated: growth potential, asset tangibility, profitability, liquidity, organizational size and inflation. These variables were regressed against leverage ratios using STATA version 17, with a fixed effects regression model employed to account for institutional differences. Findings reveal that except growth that showed positive and significant influence over leverage, other three independent variables; namely, profitability, tangibility and liquidity showed a negative significant influence over leverage, a measure used for capital structure. The findings suggest that MFI managers should carefully evaluate growth prospects, asset bases, and liquidity positions when making capital structure decisions.