This paper aimed at assessing the impact of microfinance institutions on the livelihood of the rural population in the South West Region of Cameroon taking the South West Association of Village Barns (SWAVIB) as a case study. Using a cross-sectional survey of 260 respondents and the application of the survey linear regression, the study reveals that main activities of SWAVIB that have an influence on livelihood of the communities in the region are the loans, savings and ancillary advisory services of the institutions. Also, the study finds that whereas loans obtained influence both the productivity levels and consumption (livelihood) of the beneficiaries positively and significantly, savings influence productivity positively but consumption negatively though both effects appear insignificant. Furthermore, the empirical estimates of the study show that whereas loans obtained from SWAVIB influence livelihood positively and significantly, savings made with SWAVIB have a negative but insignificant effect on livelihood. In addition the findings have shown that individuals who belong to the village barns are betteroff in terms of both productivity and livelihood (consumption levels) than non-members and also that those who diversify their production activities are better-off in terms of livelihood than those relying on a single activity with the most prominent strategies adopted are to combine crop farming with animal husbandry and to sell many different products. On the basis of these, the study recommends amongst others the promotion of village bans (village MFI) in all rural areas in the country.