Abstract:
Sri Lanka is a developing country for a long time and now it has become a
lower-middle-income country. In the development process, human resource
contributes a lot and household plays a major role. Their income and
expenditure levels decide the household savings. The significant number of
rural households still can be categorized as low-income households. Therefore
the savins rate of rural areas is significantly low. There are 82% of the total
population of Sri Lanka live in rural areas. Therefore it is essential to increase
the savings of rural low-income households. The main purpose of this study is
to study the barriers to improve the savings of rural low-income households in
Sri Lanka and find the scopes for increasing savings in rural lower-income
families. In this research, Kalahagala Grama Niladari Division of
Thamankaduwa Divisional Secretariat Division in Polonnaruwa District was
selected as the study region. Both primary and secondary data were collected.
Especially the primary data were collected by questionnaires, interviews and
site observations mixed methods. Secondary data were collected from the
books, research reports, Samurdhi bank reports and journal articles on
websites. The study reveals that the barriers of the money savings of the rural
low-income households were new trending of people to apply for loans from
micro-financial institutions and people expanding money without a farsighted
plan. Consequently, these loan processes have increased the rural indebtedness
unprecedently. Therefor new scientific understanding of investments and
entrepreneurship should be provided to the rural lower-income families.
