Developing countries in Africa including Ethiopia are facing problems like extreme poverty, unemployment, low income distributions, low health care, poor education and the like. To pullout these countries out of those problems, MSSEs came to picture as one of the most important policy tool for poverty reduction. This study has examined the impact of MSSEs for poverty reduction in Hawassa City. The data used in the study was collected using survey method from primary sources using questionnaire, interviews, personal observations and focus group discussions while secondary data sources collected using reviews and document researches. The collected data were analyzed using chi square tests, ANOVA, paired sample t-tests and descriptive statistics. The 266 MSSEs owners were selected as a sample of the study using stratified and simple random sampling techniques.