This paper reviews the literature on the effect of microfinance on women’s empowerment. The inclusion of women empowerment among other things in the UN’s Millennium Development Goals evidently demonstrates the importance of women empowerment in economic development. As a consequence, several empirical studies have been undertaken to ascertain if any relationship exists between developmental tools such as microfinance and empowerment of women. Empirical results suggest that microfinance through micro-credit has positively improved the well-being of women. However, most of the studies considered only an aspect/dimension of women’s empowerment and largely at household level. Developmental efforts should focus on multiple dimensions of women empowerment at all levels