This Bachelor thesis is a systematic review of studies from India and Bangladesh regarding the effect microcredit has on women’s empowerment. The review is based on Naila Kabeer’s definition of empowerment and the effect institutions have on women’s behaviour.  The results from the review showed that microcredit institutions mostly had a positive effect in poverty reduction but could seldom aid the women in gaining more independence.  The microcredit loans often went through the hands of the women into their husband’s hands instead.  The most positive result for women’s empowerment was that the women via microcredit organizations received a platform where they could discuss women’s issues and form relationships outside the home.  The women participating in microcredit activities experienced a positive feeling of empowerment, but seldom real empowerment in Kabeer’s definition.  Microcredit organizations do not in a significant way change the norms and cultural practices that limit women from being empowered. These practices are common in rural Bangladesh and India and include not letting women leave the house, men being the superior authority in the family and forcing women to do the house labour.