Microfinance institutions (MFIs) have been recognised as significant contributors to economic empowerment in developing countries, particularly for women entrepreneurs who often face systemic barriers. A survey was conducted among a representative sample of female small business owners in urban and rural areas, employing quantitative research methods for data collection and analysis. The findings indicate that MFIs significantly enhanced access to finance (78%) and improved business skills training (62%), contributing positively to the growth of women-owned businesses. Microfinance institutions play a crucial role in fostering entrepreneurship among women entrepreneurs in Ethiopia, offering vital support structures for economic empowerment. Policy makers should encourage MFIs to invest more resources into capacity building and technology integration to further enhance their services.