Training vs. informal financial services for the promotion of financial literacy and inclusion in Uganda Colin Agabalinda and William F. Steel Abstract: Financial education aims to promote financial inclusion by increasing understanding and use of formal financial services. Despite such training, participation in informal financial practices remains high relative to formal ones in countries like Uganda. A cross-sectional sample survey of economically active urban financial service users is used to test whether financial education through formal training is associated with financial literacy (FL) and FL is associated with increased use of financial services, especially formal ones. The findings indicate that formal financial training is significantly associated with FL, and that higher FL is associated with higher use of both formal and informal financial services. The unexpectedly strong association of the use of informal financial services with financial literacy suggests that informal financial services may have a more complementary role than a simple model of financial formalization would imply. The study suggests that promoting informal financial services may be more efficient in raising financial literacy and inclusion than financial training. Keywords: financial inclusion, financial literacy, informal finance, formal finance, training Introduction Financial inclusion is a multi-dimensional, pro-client concept, encompassing better access, products, and use of financial services. the focus is on accounts in regulated formal financial institutions, although studies in many countries, including uganda, also recognize informal financial inclusion to reflect the dualism in the financial sector. a wide range of supply-side initiatives is employed to improve the outreach of formal financial institutions, while financial education is seen as a solution to addressing demand-side barriers to formal financial inclusion. conceptually, it is believed that through financial education, individuals can acquire financial literacy; that is, the knowledge, skills, and attitudes necessary to make beneficial use of formal financial services to improve their wellbeing. the motivation for this study was to empirically assess the relationship between financial education, financial literacy, and use of financial services in a setting where financial services are readily available. Enterprise Development and Microfinance, 32:1–2, 107–122 <http://dx.doi.org/10.3362/1755-1986.20-00011> Colin Agabalinda (colina_ug@yahoo.com) Ministry of Finance, Planning and Economic Development, Uganda; William F. Steel (wsteel@steel2.net), Adjunct Professor, Institute of Statistical, Social and Economic Research, University of Ghana © Practical Action Publishing, 2021, www.practicalactionpublishing.com, ISSN: 1755-1978/1755-1986 Copyright practicalactionpublishing.com