Objectives: The study is to understand and analyze the role of microfinance in women empowerment through Self Help Groups in Chidambaram taluk, to understand the demographic profile of Self Help Group members and to give suggestions for the improvement of performance of microfinance toward women’s empowerment through self help groups. Methods/ Analysis: This study is both empirical and descriptive in nature. Both Primary and Secondary data have been made use of the analysis. Primary data will be collected through field survey and questionnaires. Personal interviews with the officials concerned are also conducted to get the needed information for the analysis. Here structured questionnaire is used as a tool for data collection from SHG members. The overall progress of the project is being assessed with the help of secondary data which are collected from published sources like annual reports, records of CREED (Centre for Rural Education and Economic Development) office, internet, books etc. A proportionate random sampling method has been used for selecting the respondents from the total SHG’s. The population of this study is the total SHG members in Chidambaram Taluk, which is a finite population. There are 680 number of SHG members in Chidambaram Taluk. It refers to the number of items to be selected from the universe to constitute as a sample. In this study 200 number of SHG members in Chidambaram Taluk would be selected as size of the sample. The total sample comprises of 50 SHG members from each 4 blocks of Chidambaram Taluk (Chidambaram urban, Chidambaram rural, Vallampadugai, Kattumanarkoil). This study is conducted for duration of two months from 28th April 2015 to 30th of June 2015.The statistical tools used for analysis are as follows, Percentage Analysis Method, Weighted Average Method, and Paired ‘t’ test. The data analyzed used SPSS Version 16 software. The study has the following limitations, some of the respondents might have answered in biased manner, the Study was limited and confined to Chidambaram Taluk only and time was a major constraint due to which the sample size is limited. Findings: The study reveals that there is a significant difference observed between income generation, contribution to house hold income, participation in house hold financial decision, improvement in standard of living, change in social status, awareness about social issues, involvement in social issues at locality, improvement in basic house hold facilities and amenities, ability to solve family related problems, self-confidence, attainment of knowledge and skills, decision making capability and ability to tackle family problems before and after microfinance usage and participation in Self Help Group. Hence, the study concludes that women are empowered because of the usage of microfinance and participation in Self Help Group. Novelty/Improvement: In every economy, women play an integral part. For achieving all round development and harmonious growth, women should also be given equal rights. In order to achieve economic development, importance has to be given to the women labor. Nowadays SHG are voluntary organizations, through which members are given micro credits and it ease them to become entrepreneurs. The empowerment of women in rural as well as urban areas can be achieved through formation of Self Help Groups (SHG) of women. The economic empowerment, which is dependent on the overall empowerment of women, can be achieved through these SHGs which involve women in the areas like health, sanitation, nutrition, agriculture, forestry etc., apart from involving them in activities pertaining micro credit.