The main objective of this study is exploring the roles of Village Saving and Loan Association for women in Bahir Dar city administration. The study focused on Village Saving and loan Association (VSLA) service delivery system, socio-economic contribution and challenges faced by VSLAs. A mixed research approach was used to undertake the study. For qualitative approach purposive sampling technique was used to select the study participants. The data was gathered through in-depth interview, FGD and Key informant interview. The participants for in-depth interview were 7women, for FGD in 2 groups: in the first group 8 and in the second 9 totally 17 women and 2 organizational staffs and 1 volunteer for key informant interview. Thematic data analysis was used to analyze the qualitative data. On the other hand for quantitative approach simple random sampling technique used for the selection of participants and 323 women selected for the study. The data was gathered through structured questionnaire and descriptive analysis was employed in analyzing the collected data using SPSS version 21. The findings of the study indicated that VSLAs delivered saving and loan services for its members and also arrange access to income generating activities and guided by the by-law that was agreed by all members Socially they actively participated in iddirs and other community engagements around their surroundings. From the participants 92.2 %, 96.9%, 98.5% and 93.8% agreed on the increment of their social participation, saving capacity, borrowing capacity and socio-economic life was changed after they joined the VSLA groups respectively. On the other hand VSLAs faced some challenges related to inaccessibility of work place, unavailability of refreshment training for members, withdrawal of members after taking credit and Limited awareness about the by- law. To conduct study on VSLAs helps to fill gaps by strengthening the involvement of stakeholders that work on women empowerment and it needs to expand the experience of the existing functional VSLAs to others to empower women economically and socially. Keywords: Challenge, Role, Self Help Group, Village Saving and Loan Association and women empowerment