Financial Inclusion, Poverty, and Income Inequality in Sri Lanka

Abstract

This study looked at the impact of financial inclusion in the alleviation of poverty and income inequality in Sri Lanka. The study is quantitative and secondary and a time series analysis was performed. According to the calculated average financial inclusion index, Sri Lanka is experiencing a trend in financial inclusion. So that it has uplifted its position as a country with a medium level of financial inclusion. The multiple regression analysis was conducted to identify the impact of financial inclusion on poverty and income inequality. While there is a negative significant relationship between financial inclusion and poverty, financial inclusion is positively related to income inequality. Further, it highlighted certain complementary considerations that are required to be implemented with the promotion of financial inclusion going beyond the traditional facets to reduce poverty and income inequality in the nation. Therefore, the conclusion highlights the disparities that exist in Sri Lanka: especially concerning gender, age, and spatial disparities.
 Keywords: Financial Inclusion, Financial Inclusion Index, Income Inequality, Poverty