The role of micro and small enterprises (MSEs) in employment and income generation isrnincreasingly recognized and has become a major playing field for policy makers with thernpurpose of enhancing growth and alleviating poverty. This study investigates aboutrnfinance as success or failure factor for micro and small enterprises. The study hasrnconducted based on a survey covering 49 randomly selected MSEs in Addis Ababa AradarnSub-City. Interviews and questionnaires have used as a tool to gather the information.rnThe main objective of this study is to examine whether firms have continued access tornfinance or not. Moreover, the study emphasized about loan size, interest rate, terms ofrnloans and timely disbursement of the loans.rnFrom the study, the most problems identified are lack access to finance andrninappropriate delivery of the loans. Moreover, MSEs are facing difficulties to bringrncollateral, disbursement of loans on time, interest rate, loan size and other availability ofrnfinancial instruments. These problems are hampering MSEs in their expansion,rndiversification, promotion and growth in some extent. The success of MSEs is measuredrnin terms of their capital, number of employees, revenue, expansion and diversification ofrnthe work. From the analysis and discussions, it was possible to identify that finance wasrnthe major problem of MSEs. On top of this, the relationship between lack of access tornfinance and success of MSEs was negative. This was consistent with the theories; and itrnimplies that finance is determinant to MSEs.rnMost of MSEs stated that lack of access to finance constrains their growth, expansion,rndiversification, promotion and competitiveness. Indeed, financial sector policies oftenrnwork against the ability of financial institutions to serve MSEs, though oftenrnunintentionally. Lack of competition in financial institutions limits MSEs to accessrnfinance. High risk and high transaction costs (real or perceived) associated with bankrnlending to MSEs likewise constrain access to finance