The study aimed at digitalization and performance of micro finance institutions with a case study of kyebando Sacco and it was guided by the following objectives; To identify the influence of Internet banking technology on the Development of financial institutions, to find out the challenges faced in adoption of digitalization by financial institutions and to establish the possible measures for improving digitalization developments in the financial institutions. The study used a case study design approach. A case study design is method known for obtaining true and comprehensive picture of a social unit, institution or community in order to understand the life cycle of that particular unit more fully. The case study approach was perceived as the most preferable way of obtaining holistic, indepth insights into the topic under investigation. The study also considered both quantitative and qualitative approach. The study also used structured questionnaire, and interviews. The study was carried out within KYEBANDO CO OPERATIVE SOCIETY LTD Gayaza road Sekati zone. A total of 44 respondents were selected based on Krejcie and Morgan (1970) sampling guidelines used the probability stratified random sampling method, and non-probability methods of purposive sampling criteria. The study of the findings indicated that the majority (55.0%) of the respondents strongly agreed that Internet banking had helped institutions to sustain business competitiveness, these were followed by (35.0%) who agreed with it, (5.0%) were not sure while (2.5%) and (2.5%) disagreed and strongly agreed respectively. It is recommended that top managers should employ high degree of concentration on technology use in order to choose the best strategy among competing alternatives to achieving organizational financial goals and set objectives