Abstract: The study aims at identifying the major factors affecting Non-performing loans of Development Bank of Ethiopia, Central Region. To achieve this objective descriptive research design was used and data has been collected mainly through primary source using questionnaire from both borrowers and region’s staffs. Secondary data were also used by reviewing the annual reports, bulletins, manuals, directives and procedures issued by the bank. 43 borrowers and 24 staffs were taken as samples from 77 default loans (Nonperforming loans) and 31 region’s staffs respectively based on stratified random sampling method of sample selection by using mathematical formula. For data analysis, descriptive statistics including mean, frequency and percentages were used and processed through computer loaded SPSS software.