Link Between Customer Perception and Financial Inclusion: An Empirical Analysis with Reference to Urban Low-income Households in Sri Lanka

Abstract

The aim of this article is to examine the link between customers’ perceptions and financial inclusion of low-income families in urban Sri Lanka. This article conceptualized financial inclusion under six supply-side variables, namely, outreach, penetration, availability, accessibility, technology and trust, and the conceptual framework is designed based on the theory of planned behaviour. Individuals’ attitudes towards the existing condition of financial inclusion representations considers as perception and was measured using a Likert scale. Primary data were collected through a sample survey utilizing a semi-structured questionnaire, which consists of 64 questions. The sample covers 383 low-income households in the Colombo and Kolonnawa divisional secretariat in Sri Lanka. The survey will be conducted in July and August 2022. Data were analyzed using a partial least square structural equation model. The results have revealed that the link between customers’ perception and accessibility, availability, penetration and trust is positive and significant. Among the significant variables, the link between customer perception and accessibility is strong while the second and third influencing variables were trust and availability, and the last was penetration. Findings emphasize the importance for the government to raise awareness of financial products, advocating for policies that promote financial knowledge and visual promotions in urban areas so that potential customers can adopt the required financial products and services.