Informal sector activities of a medium sized town in Bangladesh : a case study of Faridpur town

Abstract

After independence in tnt, populat~on of urban areas of Bangladesh has become almost double due to socio-econom~c, pol~tical reasons and sometimes natural hazards. Employment opportunities coupled with higher wages in urban labour market also attract migrants to move into the urban areas. It has been observed that rates of rural-urban migration continue to exceed rates of job creation of urban formal sector. Consequently the vast majority of unemployed people are engaged in various types of informal activities such as trade. manufacturing! transport. services etc. mainly as self-employment. Nevertheless, there is no policy guide line about the development and regulat~on of this sector in natMwal development policy. The present research study focuses on the growth pattern of informal sector enterprises of Faridpur town and also examine the level of employment generation in this sector and ~ncome status of participants. The study also describes about source of in~t~al capital and forward and backward linkages of informal sector activities. The study identifies that shortage of capital and permanent shops are the main problems towards growth and development on the informal sectors activities. In the light of r,esearch findings, the study suggests that credit should be provided to the informal sector enterprises and this will lead to higher income and generate employment. Credit can be provided formlug groups through co-operat~ves organised by the low income member enterprenurs for security and proper use of loan. Allocation of low cost permanent shops by the govt. agencies can be helpful for the development of this sector. The study further recommends that in order to reduce negatlve environmental effects the location of this sector and sub-sector activities has to be incorporated in the land use plans of the urban centres.