Vol. 6, Issue 1 (2019)
Contribution of informal sector businesses to urban poverty reduction: the case of Wolaita Sodo Town, SNNPR, Ethiopia
Author(s): Netsanet Asfaw Medhin, Eyasu Anjulo Lambebo, Getachew Petros Osebo
Abstract: The main objective of this study is to examine the contribution of informal sector businesses in solving unemployment and reducing poverty in Wolaita Sodo town. By using a well-structured questionnaire, data were gathered from 513 sample informal sector business operators. Both descriptive and inferential techniques were employed to analyze the data. Frequency distributions and cross-tabulations were used to see the percentage share among the background variables. Univariate and multivariate statistical techniques were also employed. The study revealed that the incomes obtained from the informal businesses enabled the operators, mainly, to meet the basic needs, to participate in social life, to create fixed assets and it also helped in creating employment opportunities. On the other hand, the result also showed that lack of working place, lack of supply market, lack of operating capital and bureaucracy to obtain work license are among the major problems the operators are facing. The analysis of the data also revealed that the life improvement of the informal sector business operators is associated with level of education, religion, age, initial capital, profit per day, saving from income, and length of stay in the activity. The study recommended that strategies should be designed in order to enlarge access to working places, access to supply market and access to bank loan. Improving bureaucratic procedures in government rules and regulations was also recommended.