Abstract:
Financial Inclusion is the easy access to safe savings, appropriately designed loans for poor and low –
income households and small and medium enterprises, suitable insurance and payments services. FIs
have been known to offer different services that include savings mobilization, loans, money transfers
and insurance. The purpose of this research is to identify the Relationship between Financial
inclusion and poverty reduction in Sri Lanka. The study employed a descriptive analysis and
Disproportional stratified sample technique used to select the sample from, Illukthanna, 114/D
Gramaseva Division, Kagalle. The Sample consisted of 100 families from Ilukthanna village. Data were
collected through questionnaire cleaned, coded, and analyzed by using Statistical Package for Social
Sciences (SPSS-16). Data have explained through the frequency distribution tables, bar charts and
pie charts. The results of this study highlight the positive relationship between Poverty reduction
and Household's total monthly income before financial inclusion, Age of the household's head,
Number of years the financial services has been taken, Monthly savings amount, Credit amount, Rate
of interest on savings. The study recommends the following: development of Deposit collection and
lending strategies in the FIs; Minimize the financial regulation by Central bank of Sri Lanka:
Development of Financial product and services which are gender sensitive and sensitive to lowincome earners as well as Creation of awareness on financial services both in urban and rural areas.
