Micro finance for agriculture facilitates growth in employment and output. Like many other developing countries where 45 to 80 per cent of the population derives its livelihood through agriculture, it is also the key-determining sector in the economy of Bangladesh . Farm household access to financial services increase the productivity and managerial skills, create jobs, smooth income and consumption, enlarge and diversify business, and ensure access to education and health care. But the response of microfinance institutions to agricultural credit is generally insufficient in Bangladesh . If microfinance offered at a reasonable cost by the microfinance institutions it can significantly affect agricultural productivity and efficiency. The innovation and significance of the present study is to address the following research questions: How does the microfinance offered at a reasonable cost by the microfinance institutions affect agricultural productivity and efficiency, the solutions it can bring to farming, the impact it may have on economic activity of the farm households in Bangladesh, alleviate poverty and to ensure sustained improvements in standard of living. More specifically the study attempts to examine and discuss the socio-economic characteristics of the sample households before and after taking microfinance, identify the determinants of the technical efficiency and to estimate the allocative and economic efficiency of the users of microfinance, compare per acre yield of various crops before and after taking microfinance, to investigate the impact of microfinance on farmhouse hold productivity, household income, and poverty alleviation. This study relies exclusively on primary data collected from three hundred respondents, with one hundred and fifty from each group of users and non users of microfinance. The research will use stochastic frontier approach to determine the efficiency of the farmer house hold. Finally some policy guidelines will be recommended as to how the role of microfinance could be harnessed in sustaining agricultural productivity and poverty alleviation.