Andhra Pradesh accounts for the largest number of SHGs credit linked, both in terms of number and the amount of credit. The credit resources accessed by the SHGs have been used for promoting the livelihoods of the member households. During 2016-17 alone, 385456 SHGs mobilized a total bank credit of Rs12246.11Crores, taking the outstanding loans to Rs. 13720.91 Crores by March 2017. Thus, in terms of growth of SHG savings and loan accounts as well as in terms of the amount of credit disbursed, the bank linkage programme has contributed significantly to financial inclusion and rural credit penetration in the state of Andhra Pradesh. The programme has contributed to the quality and sustainability of the community based organizations as well as to the diversification of the livelihoods of the poor. The SHG-bank linkage story of Andhra Pradesh has become a model for the rest of the country to adopt. The National Rural Livelihoods Mission (NRLM) of the Government of India has been designed on the success of the SHG bank linkage programme in Andhra Pradesh. Several factors have contributed to the success of the SHG-bank linkage programme in the state. An attempt is made in this paper to examine the growth in the SHG-bank linkage programme in Andhra Pradesh and the factors that have contributed to its success. An effort is also made to outline the pro-active role played by the GoAP in fostering SHG-bank linkage. The lessons learnt in Andhra Pradesh would be immensely useful to other states that seek to promote SHG-credit linkage.