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According to findings of different authors microfinance is providing financial services to unemployed and low income individuals or groups who would have no access to formal banking services. It has positive impact on the living standard of the poor people in particular and alleviating poverty in their household in general. It is not only undermining poverty in the country, but also empowering women through surviving and making their life prosperous with dignity and self reliance by providing financial services. And also Ethiopian Microfinance is facing different challenges in empowering such as lack of collateral assets, lack of information, work burden, production failures, verbal abuse, lack of infrastructure, low institutional capacity and opportunities of women in microfinance are providing startup capital, women empowerment, poverty eradication, social and political empowerment, improved saving skills and the above challenges listed should be take consideration by government and concerned body as well as problem solving study must be conducted.