The study reveals that Sri Lanka has achieved a high level of financial inclusion compared to other South Asian countries. There is also evidence that a larger share of households in Sri Lanka accesses multiple financial institutions for their credit and savings needs. However, the use of insurance services, ATM facilities, e-payments, and mobile banking, is relatively low. Financial education is also ad hoc and lags behind financial innovation and new products. Moreover, there is much scope to improve financial inclusion, particularly with regard to cost and quality of financial services provided, and the sustainability of financial institutions. The study also stresses the need for strengthening the current regulatory framework for the microfinance sector and client protection.