Microfinance is provision of financial services to the poor and needy. Many Microfinance institutions in India and abroad are working with the objectives to reduce the poverty, empower women and rural upliftment etc. In the current paper, the researcher has tried to evaluate the impact of microfinance in poverty reduction of poor people in Latur district of Maharashtra State through survey method. It is found that Microfinance is efficient tool in poverty reduction. Structured Questionnaire method is used to know the opinion of 300 respondents. CGAP social performance indicators of financial institutions is used to evaluate impact of microfinance in poverty reduction.