Electrical discharge coating (EDC) is a well-known technique among researchers for modification of metallic surfaces. This process is capable of producing a hard coating layer, biocompatible and high corrosion resistance at low operating cost. Unfortunately, the process develops unfavourable microcracks and porosity on the substrate surface attributed by heat generation. Thus, in this study, the effect of several parameters to the microdefects' formation was investigated through an experimental work based on fractional factorial design. This work was conducted on a nickel-titanium (NiTi) shape memory alloy by varying the EDC parameters, namely; polarity, discharge duration, peak current, pulse interval, gap voltage and additive Ti nano powder concentration in deionized water (DI water). ANOVA results exhibited that the discharge duration has dominated the microcracks and porosity fraction on the substrate surface due to the impact of high intensity of discharge energy. Although, the Ti nano powder mixed in the DI water had capability to reduce the microcracks formation, the porosity fraction during at high gap voltage setting was elevated with the Ti nano powder mixed.