This study aimed to explore the lived experiences of rural women participating in the microfinance scheme and to identify its impacts, challenges, and the participants’ policy demands. The study employed a qualitative approach and thematic analysis in rural areas of Damavand and Firuzkuh counties. Data were collected through 15 semi-structured interviews and were analyzed using MAXQDA software. The findings were organized into four main themes: the process of converting resources into agency and individual, occupational, and social outcomes; power-balancing outcomes; the gendered and place-based nature of employment challenges; and policy expectations. The findings showed that women’s access to financial and non-financial resources, in interaction with self-help groups and the support of facilitators, contributed to the development and strengthening of agency by creating economic opportunities, expanding social networks, increasing control over resources, and enhancing women’s capabilities. In some cases, this process also contributed to changes in power relations within the family ., The study makes three theoretical contributions. First, it extends the model by explaining the mechanisms through which resources are converted into agency and the contextual conditions that shape the conversion of agency into outcomes. Second, it demonstrates the role of self-help groups and facilitators as mediating and socializing mechanisms in the empowerment process. Third, it identifies a gap between policymakers’ problem identification and needs assessment and the actual demands of participating women.