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Abstract
Self Help Groups and Microfinance are the vital tools for poverty eradication. A group of 4 to 20 members can form a self-help group as per NABARD. They develop a habit of savings. The amount so collected is used for disbursement of loan. Those who do not have formal banking facilities can avail these loans for self-employment and livelihood. The self-help group and microfinance is for those who do not have access to formal credit facilities such as banks or co-operative societies. Self-help groups become the basis for action and change. It is facing social, economic, political and marketing problems. This study focuses on those problems and gives suggestions. Self-help groups disburses small loans to the rural and urban poor for the purpose of making them self-reliant and encouraging them to enter in to the mainstream of economic activities. Access to microfinance enhances the position of women and others. Ultimately results in financial inclusion.