The study which was conducted in lfako ljaye Local government area of Lagos state examined the influence of micro credit on poverty alleviation policy in Nigeria. The study among other things examined the importance Of small and medium enterprises in the development any given economy can not be over emphasized, hence, the need to undertake this study it was equally the focus of this study to examine the various ways that micro credit could affect the investment decision on poverty alleviation policy of SMEs in carry out this study and for the purpose of better understanding the historical development of micro credit usage financial institution and banking industry to eradication of poverty alleviation policy in particular was also given in depth consideration.

The researcher made of a Secondary data, although the use of micro credit on poverty alleviation policy in Nigeria economy is an objective this research work.

The SMEs were categorized into four namely: Bakery, Stationary Shop, Fashion Designer and petty trader, the data use in the research work was generated from the central bank of Nigeria bulletin and National Bureau statistic based on micro credit, poverty index and level of investment between the periods of 1995 – 2010.

The results obtained were analyzed through the use of a descriptive analysis and application software of (SPSS 17:00) which revealed micro credit is an effective tool that show a significant relationship between micro credit and poverty alleviations policy in Nigeria. In conclusion the regression run for the hypothesis stating that there is significant relationships between micro credit and investment in Nigeria.

The study recommends a greater coverage of the state by the scheme; Recipients should also be encouraged to reinvest their profit in other productive economic activities.