Impact Of Informal Business Participation On Urban Poverty Reduction: The Case Of Liban Jawi Disrict West Shoa Zone, Oromia, Region State, Ethiopia.

Abstract

Informal sector has been found to be a critical instrument for reducing the poverty in urban people. It is prominently used to improve the livelihood of urban households where it is believed to be underexploited in research and hence is dispensable to examine its real effectiveness. To this end, this study aims to assess the effect of informal sector on urban poverty reduction. A cross-sectional survey data collected from 190 urban households (81 participant and 109 non participating) using multi-stage sampling techniques from Liban Jawi Town. Both Descriptive like frequency, percent, graph and inferential analysis (Binary logistic regression) were applied for analyzing the impact of informal business on urban poverty at the study area. The result of chi-square indicate the association between urban poverty and Education level of household, Family size, House of ownership household, Rent, Spend average of per month, Average monthly spend for food, Average monthly spend for health, Types of business, License for your business, Income tax, Experience year on the current work activities, Operate business activity and Participation in business at 0.05 significance level which confirm that, those variables are statistically significant for the urban poverty at the study area. Based on the result this study recommended that it is better off the government make some policy and regulation for this sector in order to prevent the formal sector from unwanted competition and Government should constrict strategies for informal sector to enhance to transform to formal sector.