Review on Informal Business Sectors: An Emphasis on Its Practices and Opportunities

Abstract

The informal economy has rapidly expanded world-wide especially in developing countries and it is continued being the only option for socio-economic problem of the community particularly for urban poor. The practice of informal activities is more or less the same both in developed and developing countries. Many studies have indicated the significance of the sector in solving various social and economic problems of the urban poor in general and in reduction of unemployment, providing low price goods and services and new job creation in particular. Despite the fact that, the nature of the informal sector as it is neither capital intensive nor requiring educational skills it is means that poor people are drawn more to this sector than the formal sector. However, the sector remain controversial concerning its negative or positive impacts and there is strong negative views about the sectors from formal business operators, academicians and other stakeholders and because of this, the sectors is not contributing as much as it can.   Generally, there is no doubt about the substantial role of informal business in being the survival means and reducing poverty especially for urban poor communities and it requires the government support as it needs to be transformed to formalization, expanded and grow to micro level enterprise.