Microfinance is the provision of thrift credit and other financial services and products of the very small amount to the rural, semi-urban or urban areas for enabling them to raise their income levels and improve their living standard. (Joshi, 2006). The present study aimed to examine the effectiveness of microfinance institutions’ services on women economic empowerment in Tanzania. Primary data were collected by researchers by interviewing 200 female customers taking credit from BRAC (Arusha branch). Questionnaires were filled by 10 BRAC staff and management. The findings show that among the women interviewed, they benefit from 60 percent of their loans in doing business startup, 20 percent in gaining respect in the community, 10 percent in feeding the family, 8 percent in educating the family while 2 percent in covering the medical expenses. Generally majority of women tend to benefit from their loans in terms of starting their own business as they use the largest part of their loans in creating and establishing their own businesses. Keywords : microfinance, microfinance institutions, women economic empowerment, loans, BRAC DOI: 10.7176/RJFA/12-4-03 Publication date: February 28 th 2021