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In 1970s microfinance was introduced for the first time and now Islamic microfinance has been proved as a successful tool for poverty alleviation. The purpose of this study is to evaluate the Impact of Islamic microfinance on poverty in Pakistan. This research project was designed to study Islamic microfinance institutions and the impact of the Islamic Microfinance Institutions on their clients in Pakistan. Questionnaire, Group Discussions and Interviews were conducted for data collection. Primary data was collected through structured questionnaire, interviews and group discussions from Islamic Microfinance beneficiaries and clients where as secondary data is collected through online journals, articles and findings of already conducted surveys. The sample selection technique was non probability and convenience based. The variables were Living Standard of Islamic Microfinance clients, Income Level, Health conditions, availability of Islamic Microfinance, Islamic Microfinance innovative products and level of knowledge.