Using Security Group to grand access to Folder in SharePoint

MiSum83 "You can use security groups to control permissions for your site by adding security groups to SharePoint groups and granting permissions to the SharePoint groups." also, "

Since I can't actually see your site setup, I would start here by making sure they were properly applied. You say you are applying the security groups to folders inside a SP document library.  Make sure that the SGs have access to the Document library first. Once they do, you should be able to set access to the folders individually (i.e. SG1 gets access to Folder1, SG2 to 2, SG 1&2 to Folder 3, etc). I had a client for two years that we used Security Groups to do all access to SharePoint and it worked fine (with the usual caveats about S.G.s limitations). Sorry I can't be more prescriptive but it usually would take a hand's on approach to make sure it's all setup properly.  By the way, I've read rumors that MSFT is phasing out SGs. I have no idea if this is true, but you might want to consider whether you want to widely propagate this. I was working for a small NGO when I implemented it.  If we had to change it, it would be easy.