Determinants of Access to Public Sector Banking Services Among Rural People in Kandy District

Abstract

Access to public sector banking services is vital for financial inclusion and economic empowerment in rural Sri Lanka. However, communities in Pupurassa and Meethalawa, Kandy District, face significant barriers. This study examines the determinants of banking access, focusing on financial literacy, socioeconomic status, banking infrastructure, and language barriers, especially among estate and rural populations. Using a quantitative approach, a probit regression model analyzes bank account ownership among 148 respondents selected through stratified random sampling. Data were collected via structured questionnaires translated into Tamil and Sinhala, covering socioeconomic characteristics, financial behaviors, and perceptions of banking services. Descriptive statistics, frequency analysis, and marginal effects support the model. Results show that low financial literacy, particularly among Tamil-speaking estate residents, significantly limits engagement with banking services. Socioeconomic constraints such as low income and education reduce access, while distant branches and poor digital connectivity increase costs. Language barriers further limit access, as services are mostly in Sinhala or English. Marginal effects suggest that improving financial literacy and infrastructure proximity can significantly raise the likelihood of account ownership. The study recommends localized financial education, multilingual support, mobile banking units, and infrastructure development. These findings contribute to the financial inclusion discourse and support Sri Lanka’s efforts toward equitable growth in underserved rural areas.