Banana is produced by the highest number of farmers in Bench Maji and Sheka zones of the Southern region of Ethiopia. Even though the zones have high banana production potential, several constraints hamper the development of the banana sector along with the value chain. Therefore, this study was intended to analyze banana value chain in these zones of Ethiopia. Data from 180 banana producers were collected and analyzed by using descriptive statistics, marketing margin and econometric Heckman two-stage model. The result showed there is a weak relationship between banana value chain actors. The marketing margin result showed that collectors from the traders' side received the highest profit share in the banana value chain. The econometric regression result showed that extension contact, type of varieties utilized, the area allocated for banana production, distance to the nearest market, total income and education level are significantly determining factors of banana market participation. In addition, lack of an organized market, low demand during the production season, expensiveness of improved varieties and disease were top identified problems by banana producers. Thus, the concerned stakeholders and government need to give attention to increasing improved banana varieties access and improving the technical knowledge of banana producers on using best practices by arranging cross visits and field trips to areas with best banana production practice. In addition, the promotion of value addition practices and the establishment of banana cooperatives to overcome the marketing problem are also suggested.

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