A Research Report Submitted to Mzumbe University, Main Campus in Partial Fulfillment of the Requirements for Award of the Degree of Masters of Business Administration in Corporate Management (MBA-CM)Micro finances provide financial services to the poor so as to improve access to credit that enable the poor to finance productive activities that allow income generation, consumption, savings, as well as investment. This is a route out of poverty for the non-destitute chronic poor. The major challenge to PLHAs is to accept their health problems and continue with their normal life. Most of them think that after being tested and found positive, they have to wait for their death. Stigma is another challenge facing them. PLHA have many demands as they have to take their antiretroviral treatment as well as have good nutritious food. So, they have to participate fully in income generating activities. Some of them are eager to participate in those activities but the biggest barrier to them is the startup capital. Many banks and MFIs are not ready to provide micro-credit to this particular group. AFREDA has seen this challenge and decided to help PLHA with capacity building programmes including trainings and microcredit provision. The aim of this study was to assess the effectiveness of micro-finance provided by AFREDA to PLHAs and poverty reduction. The study approach was a combination of exploratory and descriptive in nature because it sought to get insights into the effectiveness of micro-finance provided by AFREDA to PLHAs and poverty reduction. A combination of quantitative and qualitative analysis was used. A random sample of 50 PLHAs were given questionnaires to fill in. The sample was drawn from TAWG databases. The findings of the study statistically reveal that there is a significant relationship between the Micro finance provided to PLHAs by AFREDA which leads to poverty reduction hence improved health status of PLHAs and reduced stigma of PLHAs. The study recommends that efforts should be made by PLHAs to ensure they protect themselves from new infections and secure their health. The government should extend support to the institutions which assists PLHAs to ensure the good implementation of micro finance policy.