Agriculture has to feed hundreds of millions more people in the future while using scarce resources more efficiently. However, without improvement in the access of farmers to technology, markets, information and credits, it is not be able to adapt production systems and cope with the challenges it is facing. This study was conducted with the aim of analyzing the impact of microcredit on the food security of rural small holder borrower households in Gesha district, with a sample of 263 respondents that is, 100 clients who have at least 4 years of attachment to the organization and 163 eligible non participants representing the characteristics of existing sample borrowers had they not been participating. Data were collected through open ended and close ended questionnaires and interview was conducted while the questionnaires were filled out by the respondents. The logit model was used to show the factors affecting the participation of households in using micro credit in this study. Consequently propensity score was estimated and matched with the help of different matching techniques. The logistic model in this study showed that the factor variables such as livestock income, contact with development agent, spending on social festivals, timelines of loan release and distance from the town were significantly affect the participation of rural small holder households in study area. The kernel matching method with the bandwidth 0.25 was chosen to estimate average treatment effect on treated in this study. The result of the study displayed that the impact of microcredit has a positive and significant average effect on households’ food security. Thus, about 609 average calorie improvements were seen for those micro credit users in the district. Therefore, based on the above significant variables the omo micro finance institution should give attention and deliver trainings, release loan by considering their time of production as well as open sub branch for the households those far away from the town to improve their participation in using credit. As far as, the borrowed amount should be invested on productive activities such rather than spending on different social festivals on the side of rural households to improve their participation status as well as their food security. The weakness and threat of the institution should take in to consideration for better promotion of microcredit services in the district. Keywords: Omo micro finance institution; impact; food security; microcredit; propensity