Dissertation (MA Business Administration)In Tanzania, women have limited access to employment opportunities in the formal sectors. As a result, many have to adopt survival strategies through the informal sector where many operate without the support of extension services or credit. Most of the women don‟t engage in Income Generating Activities (IGA) as they don‟t have sources of capital. Because of lack of source of capital, women have decided to engage in self help groups‟ which offer different kind of services including loans/credits, helping each other in sadness and happiness moments, and helping each other in agricultural activities. The purpose of the study was to investigate the effectiveness of women self help group in poverty reduction. The study involved 96 respondents from 10 different women self help groups found in Dodoma Municipality, also we had unstructured interview with 20 groups leaders from 10 different groups selected for this study making a total of 116 respondents. The respondents were of different age, marital status, education level and different sources of household income. A combination of both quantitative and qualitative research design was employed which involved both exploratory and descriptive aspects. Data were collected through questionnaire, unstructured interview and documentation. Analysis was done by SPSS with the help of Microsoft excel software. The results revealed that Women self help groups (WSHGs) have brought positive contribution on poverty reduction to women who are engaging in these groups. Women who are engaging in these groups declared that their household income has increased since they joined the groups, and they have sufficient amount of food to their household members since they joined the groups. Members have profitably and wisely invested the borrowed funds to various economic and social activities which brought positive contribution to poverty reduction. However there are challenges which these WSHGs are facing which need joint efforts to address them. They have small amount of loan capital particularly for groups with short age. They need external source of loan capital so as to fulfill the members‟ needs. The study concluded that WSHGs have brought positive changes by improving the standard of living of people who are engaging in these groups. The study mainly recommends on the following;  Ensure that groups‟ leaders and groups‟ members design the group services in relation to the needs/wants of the group members.  Ensure that there is improvement in the competence of the group leaders so as they can be able to practice good record keeping and reduces the risks of groups‟ members not to repay their loans.  Ensure that, WSHGs have adequate capital from other external sources at a reasonable interest rate to meet the needs of the groups‟ members.