Purpose: This study provides fresh survey-based evidence from Indonesia on the impact of microcredit on empowerment of micro-entrepreneurs. Methodology: Data was collected from a survey of microcredit-funded microenterprises in Surabaya, Indonesia, and its surroundings; 556 microenterprises participated voluntarily in the survey. Weighted least square mean and variance adjusted structural equation modelling (WLSMV-SEM) estimator was used to analyse the data. Findings: Results show that microcredit has a positive and significant relationship on control over resources, but business performance does not significantly mediate the microcredit-empowerment relationship. Limitations: Some limitations noted in this study are that the sample was obtained from one region of Indonesia, and was unbalanced in gender. The cross-sectional data of this study limits inferences of causality in the analyses, and prohibits the study from assessing longitudinal effects and from examining non-recursive models. Contribution: At least in the case of Indonesia, the microcredit programme is working and the actions of policymakers and donors can be justified. However, further, more detailed and cross-country investigations are required to help donors and policymakers take a more informed approach in continuing to invest in microcredit programmes at the cost of other competing alternative strategies.