'11ie r o{es of miCYo and smarr scare enterprises to tlie overa{{ economicrndevdoyment Iiave got tlie attention of yoficy mateen, inte-rnationa{rnorganiz ations, N yOs andresea-rclien as wd{ as yractitionen in 'recent days. '11ierngovernment of 'Etliioyia lias designed at a na.tiona{ {evd JvIS'Es devdoymentrnprogram by the y ear 2005 under its 'Urban Industria{ Dev e{oyment Tacteage.rn'11ie gen era{ objective of the yrogram is to design a d ear and organized yrogramrntliat can fo ster tlie invo{vement of JvISTs in urban devdoyment as wd{ as tornaugment tlie ro{es of tlie sector in reducing urban yoverty and unemy{oyment.rn'Pyovisions of credit, worteingyremise, and training as wd{ as creation of mar teetrnfinteage are devised as strategic tooCs to acliieve tlie desired Objectives. '11iis studyrnassesses tlie ro{es of JvIS'Es devdoyment strategy in r ecti/.cing urban yoverty: tlierncase of cobb{estone enterprises in Addis Ababa, XofJe X eranio SUb-city.rn'11ie stUdy is designed based on befoYe and after metliod of imyact assessment. Arntota{ of two Iiundred and ninety four oyerators were random{y sdected out ofrn3025 cliisd manufacturing oyeraton using {ottery m etliOeL Descriptive statistics,rnbivariate as wd{ as mu{tivariate regression ana{ysis and cross tabu{ations inrnS'PSS venion 16 are used to ana{yze tlie data. Questionnaire, f ocus yrouyrndiscussions, teey informant interviews and Observations are conducted onrndiffer ent asyects of tlie enteryrises. A fivd ilioOd frameworte is used tornundentand tlie strategies, assets and activities of tlie oyeraton. '11ie studyrnfindings indicated tliat in fjenera{ tlie oyerators owned asse ts after joining tliernsector. The findings of the study reveal that although there is a disparity in operators'rnincome, it is improved after the establishment. Thus, the number of poor operators, whornwere living below the absolute poverty line decreased after the implementation of thernprogram in the study area. Sex of enteryrises is tlie on{y factor found to havernsignificant il1j(uence on y erformance. '11iat is, mares tliat y erform better werern38.632 times more fitedy y e'rformed tlian f emares. yiven tlie imyortance of tliisrnsector, fn yarticu{ar, tlie promotion of miCYo and sma{{ en teryrises yrogram Ii.asrntlie yotentia{ of addressing fivefiliood requirements. 'Poficy r ecommendations ofrntlie government sliou{d advocate tateing tlie reading ro{e by yroviding anrnenabfing environment for oyerations fike trainings, tlie esta6fisliment ofrninfrastructure for access to marteets, yrovision of worte site structures,rndissemination of marteet information and innovation amongst otlier we{Ctenownrnst1'ategies.rnKeywords: Micro and small enterprises; income; livelihood: enabling environment; pelformance