A need-based scholarship is a type of financial aid that's awarded to students that come from low-income backgrounds. If they don't have the financial support to afford higher education, they are qualified for this scholarship. Now different institutes or organizations use different parameters or scales to determine one's financial capability; they have different thresholds aka criteria in terms of a student's family income.
In short, if you don't have money to study in a university, you're qualified for a need-based scholarship; you "need" this scholarship to pursue your further studies.