The women represent more than 53 percent of the population in Sri Lanka, however their active involvement in the economy is comparatively low. Facilitating women for entrepreneurial activities would lead to improve their living standards and that of their families. This would in turn pave way for economic development of the country. Generally, microfinance has been regarded as a tool for poverty alleviation according to research studies conducted in a wide cross section of countries with a focus on developing entrepreneurship among poor women. The main purpose of this paper is to review the literature on microfinance to find out the influence of microfinance services (factors of microfinance) on entrepreneurial success of poor women and understand weaknesses of such services in the process of women achieving entrepreneurial success. The study also focuses on identifying opportunities for future research in this new and growing area, with specific reference to Sri Lanka. Drawing on the literature published, the paper argues that the microfinance services play a major role in achieving entrepreneurial success of women, and also highlights drawbacks of microfinance as a strategy for developing entrepreneurship of poor women. Further, the article emphasizes the inconclusive findings on microfinance as a strategy for poverty alleviation and as a tool for entrepreneurial success. The research identifies some important areas for empirical research and the findings would facilitate microfinance service providers to design their service offers to enhance entrepreneurial outcomes of their clients. Further, policy makers would also be facilitated in taking initiatives in developing the microfinance sector in Sri Lanka.