A Self-Help Group (SHG) is a village oriented financial intermediate comprising of 10 to 20 local women or men. Normally mixed SHG is not preferred. Majority of the SHGs are found in India, even though SHGs can be found in in South Asia and Southeast Asia. SHG members contribute regular savings to a common pool for a few months in order to have sufficient capital in the group to begin advancing. Funds are then lent back to the needy members of the SHG or to other needy people in the village. Majority of the SHGs are linked to banks for the smooth and safe distribution of microcredit. The researcher analysed that the functioning of SHGs in Cochin City are economically and socially effective to a certain extend. The economic, social and personal development of SHG members and the society as a whole reveal the effectiveness of SHG. The earning capacity of self-employment program gives us a clear idea that SHG is financially effective too.