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Women in Pakistan are suffering from a great social and economic deprivation due to gender discrimination and inequitable distribution of resources. This paper examines the determinants and extent of women empowerment by their participation in microfinance programs. Data for this study were collected from different areas of Faisalabad, Pakistan, where most of the households were poor and had borrowed money from different microfinance institutes. Keeping in view the disguised endogeneity, Endogenous Switching Regression Model was employed which accounts for selection bias because of observable and unobservable factors. The analysis revealed that education level, household size, family system, educational expenditures, income level and the ownership of different assets like sewing machines have the statistically significant impact on the women decision to work and hence promote women empowerment. It is concluded that the government in developing countries should introduce income-generating activities, especially for women by providing them access to financial resources.