The purpose of the study was to determine the relationship between SMEs and Poverty reduction among small and medium size enterprises in Njeru Community, Buikwe district. The study design comprised of a combination of both descriptive and cross sectional research designs and both qualitative and quantitative data were employed. Stratified sampling was used to determine the sample size. A sample size of 36 computed by a formula for krejcie and Morgan 1970 was considered, primary data was collected by the use of questionnaires which focused on the research questions. Secondary data was got from journal reports and internet which were in relation to the study objectives. Data entered was presented by the use of frequency tables. Data analyzed by statistical packages for social scientists (SPSS) was presented in form of Pearson correlation coefficience table which show the strength of relationship between the impact of SMEs on poverty reduction levels . the findings from the study revealed that SMEs play a great role towards poverty reduction in Njeru Community. the contributions of SMEs towards poverty reduction were also revealed which included the ability of SMEs to provide loans to people. The study concluded that SMEs have played a significant strategic role in providing the bulk of capital used by small and medium size enterprises in poverty reduction. Among the recommendations of the study was that SMEs should employ highly trained staff who can do the monitoring evaluation of the utilization of the loan. And also to train, educate and sensitize the members on short-term investment and other business portfolios.