Social Capital has begun to generate a remarkable consensus regarding the role and importance of social organisations in making decentralised governance effective. This paper proposes to understand the possible role of social capital in the context of a field investigation. The study shows that there is correlation between social capital and decentralised governance and suggests that the formation of social capital is necessary and can be done by extending to Self-Help Groups, NGO’s and cooperative organisations. The study also shows that the formation of Social Capital through Microfinance by Self-Help groups is a pathway to rural development. Keywords: Social Capital, social organizations, decentralised governance, field investigation, Self-Help Groups, NGO’s & cooperative organizations, Microfinance, rural development etc.