This study was designed to assess the role of Functional Adult Literacy (FAL) to run arnsuccessful Micro and Small Enterprise (MSE) or Income Generation Activities (IGA). It alsornaddressed the characteristics of functionally literate and Functionally Illiterate micrornbusiness operators in establishing, managing and scaling-up of women entrepreneurs inrnMSEs and their IGA and the supports they acquire from FAL and MSE sector. A sample ofrn54 micro business/IGA operators, 12 group IGA leaders, 16 FAL Facilitators and 24 MSErnofficers were taken for the study using random sampling. In the process of answering thernbasic questions, a questionnaire that include characteristics of respondents, the role of FALrnto run micro business, linkage and collaboration among FAL and MSE office, challengesrnrelated to FAL program implementation was designed in a closed ended and open endedrnquestions. Moreover, interviews were held with top officials of MSEs, FAL facilitation office.rnAfter the data has been collected, it was analyzed using simple statistical techniquesrn(Frequency and percentages).The results of the study indicate characteristics of micrornbusiness operators and the role of functional adult literacy in their micro business activity. Itrnalso shows that integrating Functional Adult Literacy programme with different livelihoodrnprogram has great contribution it improve the life of needy adults. The results of the studyrnalso indicate weak collaboration among FAL facilitation office and MSE office, shortage ofrnbudget, shortage of manpower and inaccessibility of materials as among the majorrnchallenges. Moreover, lack of interest among FAL facilitators and FAL programrnparticipants due to different factors like; lack of incentive and absence of motivation fromrnfacilitators side and learners un friendly program delivery in place, time, approach and needrnfocus from, learners side are also the major challenge. Finally, based on the major findings,rnrecommendations were forwarded for concerned bodies such as existing and potential micrornbusiness operators, group IGA leaders MSE Offices, and FAL program facilitation office