Development agencies have increasingly regarded 'empowerment' as an essential objective to improve the well-being of marginalised women in India. The perceived success of self-help group (SHG) programmes in this project has encouraged their widespread application across India, becoming the primary mechanism to empower women. However, this success has often been assumed rather than proven, with evaluations generally lacking a conceptualisation of empowerment based on theoretical understandings of power relations. This article aims to overcome this by evaluating the potential of SHG programmes through the reduction of internal, institutional and social constraints that prevent the marginalised from pursuing their interests. An analysis of the 'normative' model of SHG programmes, and its actual application shows that while SHG programmes have the potential to empower women, this is often not realised through the persistence of 'top-down' approaches in implementation. SHG programmes are further limited in their ability to transform social relations due to their apparent insistence that the marginalised are the only legitimate actors in their own empowerment. Rather than argue for the discontinuation of SHG programmes in India, their potential to empower women can be increased through a 'bottom-up' orientation in implementation, while recognising that in and of themselves SHG programmes cannot reduce all the constraints preventing the pursuit of interests.