The objective of this chapter is to assess how the institutional policies of NATP (phase II) affect farmers’ capacity building in Trishal upazila, a sub-district primarily composed of resource-poor farmers. To achieve our goal, we set the hypothesis for verification as “The institutional policies of NATP (phase II) through common interest group approach have impacts on the underlying factors (accumulation of human capital and social capital), and bring the outcomes of capacity-building for sustainable socio-economic development in Bangladesh (H1)”. For hypothesis verification, we applied structural equation modeling (SEM) to the findings of structured questionnaire surveys targeting CIG, and non-CIG farmers in Trishal upazila (sub-district). It was evident that mixed-gender CIG consisting of male, and female farmers was effective for capacity-building along with group leadership, crop diversification, access to seed, and mechanized farming compared to those in single-gender CIG or non-CIG farmers. The policy implications drawn from our study suggest to pay attention to gender diversity management to minimize existing gaps, and income-generating agriculture through public-private partnerships for sustainable socio-economic development in Bangladesh.