Women economic empowerment is increasingly viewed as one of key elements in poverty reduction strategies. Position of women’s economic status in Tanzania has been low compared to men in which about 60 percent of women in Tanzania have low economic status. This study examined the contributions of Savings and Internal Lending Communities (SILCs) towards improving women’s economic status. Specifically, the study examined the main source of income among women, and examined challenges facing women in SILC. The study also assessed the level of women economic empowerment and examined the effect of SILC on women’s economic empowerment. A total of 100 respondents were involved. Primary data were collected using questionnaire which was administered to 100 respondents. Key informant interview Focus Group Discussions were also conducted so as to triangulate information gathered from survey. Descriptive statistics was used to analyze socio-demographic characteristics, the main income generating activities performed by women and challenges facing women in SILC. A Cumulative Empowerment Index (CWEEI) was computed to determine the overall level of women’s economic empowerment. An ordinal logistic regression model was used to analyze the contribution of SILC on women’s economic empowerment. The findings show that majority of women in SILC are involved in petty trading as their income generating activities. It was also found that half of women in the study area have attained medium level of empowerment. In addition, duration in SILC, involvement in IGAs and education were good predictors to women’s economic empowerment (P<0.005). The findings revealed further that, failure to repay the loan on time and lack of entrepreneurial/business management skills are the major constraints facing women. Therefore, it is recommended that stakeholders and NGOs should encourage women to join SILC.Family