Alike the role of heart for human body, finance is the focal point of an economy, whereas savings and investment are its tubes and vessels. Hence, a solid financial system is a fundamental character of an enduring economy. The frozen financial system endures longer if its foundation is concrete and subsists in the people of grass-root level. They are those, who live in villages and small towns, earn meager income, work in primary sector, spend more on food, and have lesser social securities. In this setting, the process of bringing these people into the main stream of financial activities is called financial inclusion. This study describes the determinants of financial inclusion across the South Asian Association for Regional Cooperation (SAARC) countries from 2004—2013. The study uses principal component analysis (PCA) to construct a Financial Inclusion Index. Adding to it we estimate our empirical models by using panel data estimation techniques. Our results show that level of financial inclusion and development indicators are directly related to each other. From the Socioeconomic variables, GDP per capita is positively and significantly related to the level of financial inclusion. Beyond the GDP per capita, employment status and rural population are positively and significantly related to the level of financial inclusion. Population density in this group is negatively and insignificantly related to the index of financial inclusion. Among the physical infrastructural variable road network, telephone and internet are positively and significantly related to the level of financial inclusion. From the banking sector variables NPA (Non-Performing Assets) is negatively and significantly related to financial inclusion level. CAR (Capital Asset Ratio) is positively and significantly related to the level of financial inclusion. And finally real interest rate is found negative and insignificant means does not play any significant role in determining the level of financial inclusion. Supervisor:- Dr. Abdul Rashid