
This study is to assess the impact of credit provision of microfinance institution on job creation and Poverty Reduction in Hawassa city. In order to carry out this study the field survey was conducted on a sample size of 100 members randomly from 27 small scale enterprises of the package program. The credit provision was assessed using various indicators of economic and social aspects such as income, access to education service, and health care, nutrition condition and self- employment. Thus, Microfinance programs have been considered as one of the main instruments in reducing poverty in recent development agenda. It is a means to support the marginalized active poor of the society. Microfinance comprises the provision of financial services and the management of small amounts of money through a range of products and a system of intermediary functions that are targeted at low income clients through the provision of credit and other facilities like savings, insurance, and transfer services to poor low-income household. The main objective of the study was to assess the accessibility, contributions and the implications of microfinance institutions in reducing poverty and promoting sustainable income in Hawassa City. Microfinance Institutions have an explicit potential that intends to reduce poverty. This research work employed both primary and secondary data like questionnaires, interviews, focus- group discussions and on- site- observation to collect primary data. The secondary data has been collected from different review of literatures, unpublished and published materials. The questions to be addressed in this study required both quantitative and qualitative research methodologies. This study discloses microfinance institution credit provision increase in income and diversified sources, and reduces income inequalities. It has also contributed to increase personal consumption and improved living condition in terms of assets, access to education and medical services, and creation of employment opportunities. The findings of the study indicate that the beneficiaries of credit in the area perceived their lives have improved after the intervention of the credit. The outcome of the study has established that microfinance intervention on Job creation and Poverty reduction has achieved significant improvements. Therefore, it is recommended that such a strategy and micro finance institutions should be encouraged and diversity their activities and approaches to include the active poor.