PurposeThe purpose of this paper is to examine the impact of financial inclusion on poverty alleviation through cooperative banks.Design/methodology/approachIn order to fulfil the objectives of the study, primary data were collected from 540 beneficiaries of cooperative banks operating in three northern states of India, i.e., J&K, Himachal Pradesh (HP) and Punjab using purposive sampling during July-December 2015. The technique of factor analysis had been used for summarisation of the total data into minimum factors. For checking the validity and reliability of the data, the second-order CFA was performed. Statistical techniques like one-way ANOVA, t-test and SEM were used for data analysis.FindingsThe study results reveal that financial inclusion through cooperative banks has a direct and significant impact on poverty alleviation. The study highlights that access to basic financial services such as savings, loans, insurance, credit, etc., through financial inclusion has generated a positive impact on the lives of the poor and help them to come out of the clutches of poverty.Research limitations/implicationsThe study was conducted amidst few limitations. First, the in-depth analysis of the study is restricted to three northern states only because of limited resources and time availability. Second, the study is limited to the perception of financial inclusion beneficiaries only, which, in future, could be carried further on the perception of other stakeholders such as bank officials, business correspondents, village panchayats, etc.Originality/valueThe study makes contribution towards the financial inclusion literature relating to poverty alleviation and fulfils the research gap to some extent by assessing the impact of financial inclusion on poverty alleviation through cooperative banks. This paper can help the policymakers and other stakeholders of cooperative banks in promoting banking habits among poor rural households both at the national and international level.