The aim of this study is to investigate the role of micro-credit in women empowerment. Microcredit is a small-scale credit which becomes effectual for the growth of micro enterprises and thus works in poverty alleviation in Pakistan. The major part of this research is to examine the impact of Khushhali Bank Limited (KBL), the largest microfinance bank with a huge network of branches all across the country, on the socio-economic characteristics of beneficiary women and to study the improvement in their economy and social status. The type of economic activities women have started and extent of poverty alleviation have also been studied. The empirical study is conducted in Pakistan. Based on qualitative research, the data is collected through in-depth interviews from borrowers and National Distribution Manager of Khushhali Bank Limited. The findings suggest that micro-credit has positive impact on women socio-economic status and empowerment. It increases to some extent self-confidence and feelings of identity for women in the society. Through interviews we came to know that microcredit has dual effect on the lives of borrowers. It not only helped women to increase their businesses, but also helped them to provide better education to their children. They feel much independence and decision making power in routine life. It has also increased their prestige and status in their family and society. Micro-credit is much helpful for the women who have their own businesses or have some ideas and expertise about the business before getting credit. The women who don’t have pre-requisite knowledge or expertise of business, they could not make any positive change in their status. Microcredit rather put an extra burden of repayment with an extensive amount of interest. They used the loan amount on personal expenses and it made difficult for them to return the loan amount. The study also entailed lack of centralized system between the microfinance institutions that increased the risk of dual loaning. This trend adversely affects the repayment capacity of borrowers and limits the positive impact of micro-credit.