An Analysis of Financial Inclusion in Sri Lanka: Progress and Challenges

This study evaluates the current state of financial inclusion in Sri Lanka, analysing progress, and challenges, in expanding access to and usage of formal financial services. Focusing on key indicators like account ownership, savings behaviour, investment patterns, and digital financial service adoption, the research reveals an inequality between access and usage. While a high percentage of Sri Lankans have bank accounts, informal savings methods remain prevalent, indicating a potential lack of trust in or understanding of formal financial institutions. Notwithstanding high mobile phone penetration, the adoption of digital financial services, particularly mobile money is low, especially among women, highlighting a significant gender gap. The study concludes that Sri Lanka needs to shift its focus from simply providing access to actively promoting usage of formal financial products, bridging the digital gender divide, fostering financial literacy, and building trust in the formal financial system to achieve true financial inclusion and contribute to sustainable economic development. Key Word: Financial Inclusion, Sri Lanka, Account Ownership, Digital Money