In Ethiopia, the micro and small enterprise sector is a recent phenomenon and has increased in a short /'·period of time. Different studies were conducted and provide valuable insights regarding factors that J affect the success or failure of micro and small enterprises and/ or the success or failure of women's working in micro and small enterprises. They did not, however, address the issue of impact assessment of women's working in MSEs on livelihood or wellbeing indicators. This study attempts to address the impact of micro and small ertterprises on wellbeing indicators of women working in micro and small enterprises (MSEs) compared to women not working in MSEs in Bahir Dar City. The study also attempts to analyze factors affecting income which is the main wellbeing indicator of women working in MSEs in t'h~ study area. , "' Abstract The study used quantitative research approach and both primary and secondary data were employed. Questionnaires were the main data collection instruments. The study employed simple random sampling techniques and a sample size of 172 respondents were covered. The data were analyzed using univariate, bivariate and multivariate analysis techniques. Inferential statistics such as the chi -- square test, t- test and multiple regression model were employed. , C,;.; In the ~tudy, there is a marked difference in livelihood between women who are working in micro and small enterprises and women not working in MSEs. The livelihood of women working in A1SEs was significantly greater than women not working in MSEs. The.findings of the study indicated that micro and small enterprises are contributing to the sustenance and improvement of the life of women working in MSEs and their households although the impact varies. The study shows that MSEs have contributed to creete and improve employment, increase in income and diversified 'sources of income. They have also contributed to increased consumption and improved living condition in terms of house repairs and expansions, constructing toilets, and access to better energy sources and medical services. Another contribution of the MSE is capital accumulation in the form of increased saving. Furthermore, it contributed to better position of women in terms of improved attitude, increased participation in community issues and increased self-confidence and self-image. Women in MSE~ are found in a better position compared to women not in MSEs due to their engagement in MSEs. The findings show that credit/loan and previous income status of women were found to exert a strong f positive impact on current income and are the most significant predictors of income. Age and current t work experience were associated with a negative impact on income. However, education was not a ._ significant predictor of income. This study contributes to the understanding of women working in MSEs in Bahir Dar City by assessing the impact of MSEs on women and analyzing the factors influencing their· income. Finally the study recommends that the government should encourage the sector by reducing or if possible by avoiding the constraints it faces like shortage of finance and that further research in this area is warranted