This study is aimed to measure the increase in probability of income level of micro financed entrepreneurs and
non-borrowers. The paper identifies some areas for small investment that are more effective to reduce poverty
and raises the welfare of mass public of Layyah, South Punjab. Based on 351 cross section observation of
borrower (small entrepreneurs) and non-borrower; it is found that the income of micro financed borrowers is
greater on average by 17% as compared to that of the non-borrowers. The funds borrowed from Punjab Rural
Support Program and First Microfinance Bank is more productive as compared to that of Khushhali Bank.
Khushhali Bank fails to improve the living standard of the borrowers. Funds invested in livestock and small
business sector are highly profitable while funds invested in other farming activities like agriculture are not
lucrative for raising income level and in poverty reduction.