Entrepreneurs not only create benefits through the expansion and the development of economic and business industry, it also creates challenges for emerging micro-entrepreneurs to effectively compete in an environment characterised by multitude of challenges. The question is whether the development of micro-entrepreneurship industry is a progressive approach that can motivate the small and medium entrepreneurs to eradicate poverty. This paper is a deliberate attempt to revisit the essential concept and practice of micro-entrepreneurship in small and medium industry as well as its role in eradicating poverty in Malaysian. The Malaysian government has launched the New Economic Policy to eradicate hardcore poverty, restructuring employment and developing the rural area of Malaysia. It has been determined that the development of micro-entrepreneurship significantly contributed to small and medium industry and poverty eradication. Furthermore, the success of poverty eradication has significantly created awareness among micro-entrepreneurs in small and medium industry. In this paper, a comprehensive model of micro-entrepreneurship strategy in small and medium industry in eradicating poverty has been constructed with the aim of assisting the Malaysia government in developing their socio-economic policies.