The concept of SHG (Self Help Group) did not get enough attention in Ethiopiarnespecially in governmental development policies, strategies and activities. There are few nongovernmentalrninstitutions which work on the concept especially in urban areas of the countryrnbut, there is no enough research conducted on the issue in Ethiopia. Nevertheless, SHGrndevelopment strategy have a number of significant contributions for the holistic development ofrnthe poor community particularly women. In Ethiopia, women are disproportionately impacted byrnextreme poverty, unemployment, drained living environment, social injustice, discrimination andrnother insecurities of life. So, to bring sustainable development in the country it is vital tornempower this section of the society who needs empowerment and inspiration to change their lifernand contribute for the development of their country. The concept of SHG stress on the existingrnassets of the poor community and bringing community mobilized development by empoweringrnthe poor how they can utilize their economic, social and other kinds of resources among them. Itrninspires poor women to get out of poverty by using their natural potential and gift throughrnregular weakly saving, access to internal and external loan and intensive capacity buildingrntraining so as to begin and expand small business and income generating activities. ThereforernSHGs can serve as the best development strategy to empower and enable destitute people tornutilize the existing assets and bring real change in their life and among the community. Thernpurpose of this study is to explore the challenges of SHGs and to investigate the contribution ofrnself-help groups on the life of poor women within the selected sites of Addis Ababa, in which thernEKHC integrated urban development program, is engaged and to identify further or alternativernways that the program will operate more efficiently for the future. The research is conducted inrnfour sites namely, Gottera, Qeranio-Bethel, Sar Betoch and Qore, Mikael and Mekanisa area ofrnthe project. Data collection methods used in this study includes in-depth Interview, observation,rnfocus group discussion and document review. Two FGDs were held with 12 participants, 16rnSHG members and leaders and 4 project coordinating staff members participated in the in-depthrninterview. The study identified four major contributions of SHGs namely social empowerment,rneconomic empowerment, leadership empowerment and ethical improvement. SHG played a greatrnrole in improving saving culture, social life, emotional intelligence and leadership skill of thernpoor women. On the other hand, SHGs encountered critical challenges in the process ofrnimplementing the concept among the community such as financial and material aid expectationsrnfrom the project, lack of market place and illiteracy of some members of the group. The studyrnconcluded that through participating in SHGs, it is possible to bring sustainable development andrnchange in the economic life of the members such as level of income, health care, education andrnhousing condition