Self Help Groups were the machinery that the Government of India started as effective tool to reduce the poverty. The microfinance was blend of formal and informal system of providing the credit. The rural areas were predominantly financed by the co-operatives. The problem with the collateral security that non-existed with the rural poor was the reason that Banks found it difficult to cope with the financial need of the rural masses. The Self Help Groups which operated on the co-operative principles to muster the collective actions. The finances were provided at the door steps of the members without any lapse. SHG is functioning under various models based on the tenet of the achieving of self-sufficiency and growth of the income.