The development is a process by which the members of a society increase their personal and institutional capacities to mobilize and manage their resources to produce sustainable and justly distributed improvements in the quality of life consistent with their own aspirations. In this work, it is attempted to understand the conceptual frame and theoretical premises of the concepts involved in SHGs and thereby lay the foundation for understanding the concepts and structure of Self Help Groups in order to evaluate their economic impact on the women development. The SHG is the brainchild of Grameen Bank of Bangladesh, which was founded by Prof. Mohammed Yunus of Chittagong University in 1975. The concept of SHG serves to underline the principle for the people, by the people and of the people. Mohammed Yunus, popularly known as the father of micro credit system, started a research project in Bangladesh in 1979 and came out with ideas of micro credit that resulted in the establishment of Grameen Bank in 1983.