Self-Help Groups (SHGs) have emerged as an important method for empowering women and promoting sustainable livelihood development in rural India. This study investigates the mechanisms by which self-help groups (SHGs) stimulate socio-economic transformation in Murshidabad district, a place characterised by gendered limitations and livelihood instability. Using a mixed-methods methodology, the study surveyed 30 self-help group members and 150 households. The study found that joining a self-help group (SHG) improves women’s financial literacy, savings habits, and access to formal loans. Collective effort generates social capital, which strengthens confidence and community participation. Livelihood benefits were visible but variable, with better results tied to practical training and market connections. To ensure that self-help groups (SHGs) support long-term empowerment and sustainable livelihoods, the study recommends targeted capacity- building, greater value-chain integration, and gender- sensitization activities.