Traditionally, micro financial institutions have targeted the poorest of the poor. In promoting social uplifting through providing microfinance services, micro financial institutions have achieved tremendous results which are unprecedented in development cooperation. Commercial banks generally do not serve the needs of the rural poor because of the perceived high risk and the high transaction costs associated with small loans and savings deposits. The principal aim of the study was to assess the effect of microfinance on rural enterprises in the Walewale community. The sample size is seventy-eight (78) people from the target groups. All the 78 client and staff respondents were selected within the Walewale township. The findings of the study suggest that the beneficiaries were engaged in varied economic activities such as food processing, petty trading, tailoring etc. Overall, the respondents expressed satisfaction with their increased working capital as a result of participation in the schemes. There is no denying the fact that the effect of microcredit on small and medium enterprises in Walewale is remarkable. The findings of the study had confirmed most of the earlier studies undertaken into the operations of microfinance institutions.