Microfinance has been recognised world over as one of the effective development paradigms for alleviating poverty. With special emphasis on social as well as economic empowerment of the poorest, especially women, microfinance initiative through Self Help Groups (SHGs) launched by NABARD during early 90¿s, has been recognized as the largest microfinance programme in the world. Experience of financing through SHGs conveys the message that the key to success lies in the evolution and participation of community based organizations at the grass root level. People¿s participation in credit delivery and recovery and outreach of the formal credit institutions to borrowers through group approach, i.e., SHGs have become vehicles for the success in purveying credit to the rural poor.The programme of linking SHGs with banks initiated by NABARD in the year 1992, seems to have taken off in terms of coverage of SHGs and their ultimate group members.