Most attention has been paid to the impact of financial inclusion on poverty reduction, the causal relationship between financial inclusion and poverty reduction has seen much less attention. The study sheds light on the potential causal links between financial inclusion and poverty reduction in 34 developing countries from 2012 to 2021 using Panel Vector Autoregressive Granger causality (PVAR-GC). The result found that there is bidirectional causality between financial inclusion index and the poverty head count of the selected developing countries. Most interesting is that the causality running from poverty reduction to financial inclusion is much stronger than the causality running from financial inclusion to poverty reduction. Therefore, policymakers should focus on pro-financial inclusion policies, such as promoting greater banking competition or reducing barriers for vulnerable individuals like women, the aged and low-income clients to open bank and mobile money accounts. Also, policies should be directed towards implementation of targeted social protection programs which will alleviate poverty and provide means in including the poor in the formal financial system.