A study of the relationship between financial inclusion and poverty reduction: with special reference at 114/D Gramaseva division, Illukthanna village, Kagalle

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.