The study on “Community based savings micro finance and household income poverty eradication in Kabwohe town council, Sheema district” was guided by three research objectives which sought to: Examine the impact of Community Based Savings Micro Finance towards poverty eradication among the households of Kabwohe town council Sheema district; establish the challenges being faced by Community Based Savings Micro Finance beneficiaries in their struggle to eradicate household income poverty; and find out the solutions to the challenges faced by community based savings in Kabwohe is a town council. The study established that, the majority 51(85%) of the respondents informed this study that CBSMFs have benefited households in Kabwohe town council. Only 9 (15 %) of the respondents did not agree to this. CBMFs have also given a chance to the school drop outs to join vocational schools to learn practical skills. Some members are now technicians and mechanics and others have started their own garages. Other members have been facilitated to buy land to cultivate food for household consumption and realize a surplus for sale. The study also established that; lack of business skills to diversity investment opportunities, the repayment period is too short to make profits, the loan amount is too little to be invested productively, in some CBSMF Interest rate is too high (up to 20%) were the challenges faced by the CBSMF. On the solutions to the problems, the suggested that study members should be trained to manage the loans properly if they are to eradicate household income poverty and the same number (14) said loan terms should be improved, while 9 people said that people should be educated about management of productive projects for them to gain profits. Eight (8) respondents (13%) suggested that the government should help to top up their savings so that loan amounts are increased to enable members eradicate household income poverty.