Financial inclusion has become an important consideration for promoting the financial capabilities of small business owners and vulnerable groups. The Pradhan Mantri Jan Dhan Yojana (PMJDY) was launched to promote financial inclusion by providing banking access to socially vulnerable groups. Small vendors form an important part of the informal business sector, but their level of financial inclusion may be affected by their knowledge of financial products and services. The present study was conducted to evaluate the impact of participation in PMJDY on the financial inclusion of small vendors. The study was conducted using quantitative research design. The research instrument was a structured questionnaire administered to 210 small vendors using Google Forms to collect primary data. The study adopted a purposive sampling technique to select small vendors with PMJDY accounts. The questionnaire had 25 statements on PMJDY Participation, Financial Literacy and Financial Inclusion using a five-point Likert scale. Statistical analysis of the data was done using IBM SPSS Statistics and JASP research software using reliability analysis, Confirmatory Factor Analysis, Pearson correlation and multiple regression analysis. The results of the study revealed that PMJDY Participation has a positive influence on Financial Inclusion (β = 0.191, p < 0.001). The study further revealed that Financial Literacy has a positive influence on Financial Inclusion (β = 0.573, p < 0.001). The regression model explained 44.7% of the variance in Financial Inclusion. The study recommends the need for banks and policymakers to pay more attention to the financial inclusion of small vendors through PMJDY and financial literacy programs.