The study seeks to analyze impact of livestock credit and simulate the effect of change in covariates of poverty on households’ consumption expenditure. Data was generated through in person interview of sampled rural households in the Ethiopian Productive Safety Net area. Descriptive statistics, poverty indices, multiple regression, and simulation techniques were applied. The results identified covariates with statistically significant coefficients. The specific contribution in increasing consumption expenditure and reduction in poverty indices as a result of marginal change in covariates was examined. These specific factors need to be considered in designing poverty reduction strategies depending on magnitude of their contribution.