A Dissertation Submitted In Partial Fulfillment of the Requirements for Award of The Master of Science In Accounting and FinanceThe study of Microfinance Institutions on their Assessment, Performance and Contribution to the Poverty Reduction in Urban Communities” A case of MWASHITA SACCOS was tested among 95 members of Mwashita SACCOS in Dodoma municipality. Simple random sampling and purposeful sampling was employed to select the sample. Four research questions guided the study. A well structured questionnaire that was tested for reliability and validated was used as the instrument for the study. The results obtained were analyzed using regression analysis. The findings indicated that there is the positive relationship between MFI financial stability, loan recovery efficiency, amount of loan and training services to poverty reduction in urban communities. The impact of MFI training services to the poverty reduction in urban community was revealed that the correlation between TS and PRUC is 0.622, AL and PRUC is 0.243, LRE and PRUC is 0.043 also FS and PRUC is 0.042 which indicates that increase in TS, AL, LRE and FS are resulting into increase in PRUC. The study concluded that microfinance institution is indeed a potential strategy to poverty reduction and a viable tool for purveying credit to the low income earner. However, microfinance can be a more viable tool for sustainable poverty alleviation if more is done on training on the uses of loan and how to recover it.