In a scholarship application that asks about "overcoming challenges," does this refer to financial challenges or other kinds?
They're leaving the question open-ended intentionally. They will use your answer to judge whether you're a good fit for the school's culture.

Generally when you see questions like this for things like admissions essays or in interviews, the interviewer wants to give you an honest and complete answer. You can discuss any kinds of challenges here, be they personal, financial, or strictly academic, but only bring the challenge up if the way you responded to it either taught you something or reflects a positive character trait.

The goal for your essay should be to show the reader why you deserve the scholarship or why you are most likely to use that money in a better way than another recipient might be. Because of this, keep in mind the kind of scholarship it is. If it's a minority scholarship, for example, remember that the scholarship is, at its core, designed to help underprivileged kids have the opportunity to go to school, and those kinds of scholarships are especially relevant to bright kids with decent test scores who come from places with limited academic resources or families with low income. That kind of situation might give you all sorts of stuff to talk about, from disrespectful kids and xenophobic teachers to insufficient access to technology and school supplies. If you can show that you faced some or all of these kinds of challenges but still got a 29 on your ACT (because you worked hard and applied yourself, naturally), the Minority Office might be more impressed with your application. Review the mission statement of the department that will be receiving the recommendation before writing it, and always tweak essays for other departments before you send out the letters.