In India, particularly low-income people are having very little access to formal financial services. As per the RBI's Financial Stability Report of June 2013, savings of rural households to GDP has fallen from 36.8% in 2007-08 to 30.8% in 2011-12. It clearly indicates that there is a need for strengthening formal financial system for the development of an economy. Nation Sample Survey Organization's data reveals that out of 89.3 million households, only 45.9 million households, i.e., 51.4% do not have access to credit. This study investigates further status of financial inclusion among rural households in Krishna District, Andhra Pradesh and examines the factors to motivate rural households for expansion of financial inclusion and reducing informal lenders in Krishna District, Andhra Pradesh.