Growing competition in microfinance markets has recently been censured for default crises and less self-sustainability of microfinance institutions (MFIs). This study introduces a new competition indicator to microfinance data, and also uses the usual measures, to explore how competition impacts MFIs’ outreach and performance, capitalization and portfolio quality using MFI-level cross-country panel data compiled from reliable secondary sources. Instrumental variables approach with GMM technique tackles the potential endogeneity of performance and costs. Results show that competition has no impact on MFIs’ depth of outreach and profitability, but it can improve repayments and capitalization levels. Results also show that competition levels over the years vary in some countries while remain unchanged in others and findings differ as competition measures change. Analyses should arouse further research interests, replication elsewhere and help MFIs to attain self- sustainability.