The Maj or causes of low economic g rowth and hi g h incidenc e o f poverty IIIrnE thi op i a, includes l ac k of e mplo y m e nt opportunities, education, h ea lth a nd e tc .rnTo reve rse th e eco nomic declin e and p ove rt y s ituation in the country, th ernE thiopian government has tak e n poli cy mea s ur e, such as, s tructural a dju st mentrnpro g ram (SAP), ag ricultural d ev ci o pment led industrialization (ADLI) andrnpoverty reducti o n strategy paper (P R S P). C urrently , increa si ng the acc ess tornmicro finan ce se rv ice s for th e poor arc accepted a s olle of the too l to attackrnpoverty.rnOCSSCO is one th e MF' I that was established in August 1997 to achieve th esernob j ec ti ves in th e region. This thesis att e mpt to sec the impa c t of thi s in s titutionrnw h e ther it impr oves the li v in g s tandard o f it s cli e nt s or not and the challenges itrnexpe ri e nc ed in the G uto Wayu Woreda.rnPrimary data were co llected through s tructured questionn a ire from frequ e nt andrnnew clients. Seco ndary data were collected from different publi s hed books,rnunpublished yea rl y o r Â«uarterl y reports journ a l articles, CSA report s and o th e rrnr e lc va nt offi c ial reports .rnT h e impa ct assessment was based o n the va ri a'blcs s uch as i n co me , nutritionalrnstat us, ac cess to e ducati o n , m e di ca l facilitie s, sav in g and e mpl oy m e ntrnopportunities . The findin g of the ' s tud y indicat ed that the the OCSSCO'S mi c rornfinancing sc h e m e has had a po s iti ve impact 011 improving the li vi n g s tand a rd s ofrnits c li e nt s ill th e s tud y area.rnAuse nce of ad e quate trained m a na power to follow up a nd s uper v ise thernactivities o f the poor who operates th e ir business in the environments with hi g hrnbusiness ri s k in nature has been found in the s tud y .There fore, OCSSCO S h o uldrnd ev el o p the capacity of its staff. In addition OCSSCO Illust make an effort tornstrengthen it s financial capacity in o rd er to incre ase the amount of loan itrndisburses for eac h client.