Microfinance through Self-Help Group (SHG) is a gadget for poverty reduction and an opportunity for empowerment of poor women. Many studies show that microfinance plays an important role beyond enterprise development in supporting the livelihoods of the poor. Micro financing through self-help groups has transferred the real economic power into the hands of women and has considerably created a space for gender equality. Studies conducted by various experts have shown that the self-help groups have indeed helped in the social and economic empowerment of rural women, and at the same time delivers crucial financial services. SHG has expanded as the largest microfinance programme in the world in terms of its outreach and has extended banking service to people hitherto not served by the banking system. This paper focuses on the impact of microfinance on poverty reduction and empowerment of women at Guntur district, Andhra Pradesh.