Based on the panel data of Shandong Provinces micro credit companies during 2009—2014， the author first uses the fixed effect model and instrumental variable and the mediation effect analysis methods， and then empirically studies the effect of microfinance on farmers income and through the perspective of farmers self employment intermediary effect. The results show that microfinance has a significant positive effect on farmers income， but because microfinances development scale is limited， its influence degree is still relatively low. Meanwhile， by using the mediation effect analysis method， the author verifies that the farmers self employment has a significant mediation effect between the effects of microfinance on farmers income. So， in order to promote the growth of farmers income， the government should promote the development of microfinance， and increase the financial support of farmers self employment.