The roles of micro and small enterprises (MSEs) to the overall economic development have got thernattention of policy makers, international organizations, NGOs and researchers as well as practitionersrnIn recent days, In Ethiopia the role of MSEs in employment creation, economic growth and povertyrnalleviation as opposed to being viewed as marginal and unproductive, as well as tax evader hasrnreceived the recognition it deserves, as explicitly stated in the MSEs development program of therncountry, The government has designed at a national level MSEs development program by the yearrn2005 under its Urban Industrial Development Package, The general objective of the program is torndesign a clear and organized program that can foster the involvement of MSEs in urban developmentrnas well as to augment the role of the sector in reducing urban poverty and unemployment Thernprogram has a specific objective of creating 80% & 20% permanent and temporary employmentrnopportunities and thereby to reduce urban poverty by the year 2009 in the country Provisions ofrncredit. working premise, and training as well as creation of market linkage are devised as strategicrntools to achieve the desired objectives, Although the program has been implemented since 2005 itsrnperformance is not assessed yet consequently, this study assess the impact of the program Inrnreducing urban poverty In the case of Gulelle sub city of Addis Ababa mainly , on operators whornengaged in the construction and textile & garment sub sectors, The study is designed based onrnbefore and after method of impact assessment without a control group, 133 sample operators who arernorganized under cooperative form of business organization are drawn out of 450 operators working inrnthe two sub sectors using probability sampling method, For triangulation purpose primary data werernga thered using different techniques, The findings of the study reveal that although there is a disparityrnIn operators' income, it is improved after the establishment of the cooperatives, Thus, the number ofrnpoor operators, who were living below the absolute poverty line decreased after the implementation ofrnthe program in the study area But, improvement in income could not improve the overall livingrnstandard of the operators, Therefore, to make the two sub sectors growth oriented , competitive andrnsustainable appropriate areas of intervention are required in boosting institutional frameworks both onrnthe supply and demand sides of the two sub sectors in the study area,rnKey Words: MSEs, permanent employment opportu nity, temporary employment opportun ity,rncooperatives .