Quite a sizable number of people in urban Ethiopia make their living as informal sector operators.rnAmong the many problems facing the sector, lack of financial intermediation by formal financialrnInstitutions is one. The informal financial sector is of prime importance to informal sector operators inrnEthiopia. Iddirs, iqqubs, etc, are community-based networks that provide financial intermediation ofrnthose sectors neglected by formal financial institutions. Having understood the importance of suchrninstitutions in credit intermediation for the fight against poverty, an international consortium ofrnNGOs, called ACORD has opted in working through iddirs as entry media for microcreditrnIntermediation to the urban informal sector operators in Dire Dawa. This study assesses the impact ofrnACORD's microcredit scheme through iddirs on program participants. Besides, loan repaymentrnperformance along with assessing determinants of full loan repayment for the ACORD microcreditrnscheme in Dire Dawa is measured in the study. The institutional viability of the small loan programrnrun through the iddirs in Dire Dawa is as well appraised. Since the credit market is generally believedrnto suffer from the problem of information asymmetry, the study at/empts to find out whether ACORD'srniddir-based credit intermediation is sustaining serious impediments of the sort.rnrnBased on surveyed data on ACORD's iddir-based credit scheme, the study concludes that the majorityrnof the program participants have benefited in most welfare measuring variables after the loanrnprogram. These are among others, changes in income, assets, nutrition, access to medical andrneducational facilities, as well as positive overall impacts on women. Regarding loan repaymentrnperformance, the scheme has maintained a more than 90% recovery rate over the last five years and isrnplausible by many microfinance institutions' standards in the country. Based on regression estimates,rnit is found that loan size, and the number of dependent are significant and positively related to loanrndiversion while use of bookkeeping and interest rates have shown negative Signs. on the other hand,rnestimates for the full loan repayment equation depict that the coefficients for other income sources,rnloan supervision visits, perceived cost of default, income from loan financed business and interest raternare all significant and positively related to full loan repayment. With respect to institutional viability,rnthe provision of capacity building supports, initiatives connected to networking and intuitionsrnbuilding like the formation of CBO associations, the commitment of members, etc. are promisingrnsymptoms towards attaining institutional viability of the ACORD-initiated CBOs revolving creditrnscheme in Dire Dawa. Information asymmetry is less of a problem in the Dire Dawa iddir-based loanrnprogram, even in the face of high interest rates. This is so because peer pressure & social sanctionsrnplay very vital roles in mitigating both adverse selection and moral hazard along with the fact thernfinancial services provided are kind of user-owned operations.rnrnIt can be learned from this research findings that microcredit services are important means ofrnalleviating poverty and impacting positive welfare shocks to program participants in Ethiopia.rnInformal financial institutions like iddirs are also a viable means of reaching the poor through smallrnloan programs, given that they are provided some seed capital along with the necessary technicalrnsupport that later on will qualify them to graduate to form a financial operator