This study examines the financial behaviour of rural households in Nilambur Block (Malappuram District, Kerala) with a particular focus on financing decisions, attitudes towards financial literacy, availability/accessibility of financial sources, and sources of constraints towards accessing formal financial institutions. Based upon a descriptive design, primary data was sourced via a structured questionnaire from 400 households in 5 panchayats. Analysis provided insight into various social and economic factors, including income, education, and occupation, that were significantly influencing financial literacy and financing decisions. As income levels increased with education, households exhibited higher levels of engagement with formal financial services. Lower-income groups, on the contrary, relied heavily on informal/living-room sources, as it was the only available option. Structural and behavioural factors posed barriers, such as cumbersome paperwork and delays, access and interactions with institutional environments, and trust and fear in relying on others or engaging with institutions/financial service providers where they lacked awareness. ANOVA, chi-square tests, and MANOVA analyses confirmed various demographic variables influenced attitudes towards financial services, patterns of single or multiple sources, and convenience-based accessibility/higher preference styles of party and finance, respectively. The study emphasized the need for reform and to provide targeted education-based action to mitigate barriers to financial inclusion in rural Kerala. This study suggests potential measures can be adopted for developing socially responsible programs to promote equality in rural financial development with a focus on social and informal practices.