The present study examines the role of different MFIs specific factors and economic conditions in determination of lending interest rate and impact of lending interest rate on the financial and social performance and on the financial inclusion. The study has covered 5-star MFIs across four regions of the world separately. The period of this study is from 2009-2012 and the panel data estimation techniques are applied. Data for MFIs belonging to four regions of the world, have been taken from microfinance information exchange (Mix).Financial performance is captured through Return on assets, Return on equity, and Financial Self-sufficiency. Whereas Social performance is measured by average loan size, number of active borrowers and percentage of women borrowers. The study has analyzed the impact of financial, social performance of MFIs and financial inclusion on lending interest rate that is a weighted average of the interest rate actually received by the micro finance institutions from their clients. The results have shown that funding cost, return on assets, number of credit clients have significant positive impact on lending interest rate in the four regions. Whereas average loan size has significant inverse relation with lending interest rates thus affecting the depth of outreach. The results have also shown that productivity plays an important role in determination of lending interest rate across the world. The results also indicate that lending interest rate has positive and significant impact on financial inclusion. Supervisor: Dr Attiya. Y. Javed