Dissertation (Master of Business Administration)Women empowerment has been the vast topic in the world. Despite the increase of Microfinance Institutions (MFIs) services offered in various areas to make women’s lives better, they are still poor. Therefore this study aimed at examining the effect of MFI membership in empowering women. The study was conducted in Sumbawanga Municipality, the sample size of 60 was used and a semi-structured questionnaire was used to collect information. SPSS 22 was used to do analysis of the collected data. The study found out that there was the positive effect of the MFI membership in empowering women on decision making, control over income, freedom of movement, political knowledge as well as self-efficiency and esteem. In examining the perception of the MFI women borrowers on the process of obtaining loans, this study found out that there was bad perception on the process of obtaining loans to the women borrowers like high interest rate, loans delay as well as bureaucracy. The study also found that there were challenges which impede women in gaining empowerment which are business and economic instability, high interest rate to the loan provided and shortage of capital as the major challenges which are facing women in gaining empowerment. The recommendation was drawn to the MFIs and government in general so as to make sure they are smoothing process of obtaining loans by reducing bureaucracy, reviewing the interest rate to see if it is favourable to the borrowers as well increasing training to women members of MFIs women in order to empower them all the more.