The Potential of Microenterprise Development among the Urban Poor

D. P. S. Chandrakumara, N. M. A. Jayasinghe


Microenterprises are crucial for an economy since they have a possibility toexpand to large-scale enterprises over the time while serving as the livelihood of thepoor at present. This paper aims at identifying the potential of (i) initiatingmicroenterprises among the urban poor who do not presently engage in such activitiesand (ii) promoting the enterprises of those who have already initiated such enterprise.The study was completely based on primary data collected from a questionnaire surveyconducted in a sample of underserved settlements within the Colombo city limits. Thestudy used simple quantitative techniques based on the Statistical Package for SocialScientists. The study revealed that those who are engaged in full-time jobs do not havethe opportunity to become entrepreneurs due to lack of time for extra activities.Especially, the employment of the youth in full-time minor jobs deviate them frommicro entrepreneurial activities. As such, elderly and disabled people and women whodo not have a good educational background and those who have no strong effectivedemand in the labor market as skilled or unskilled laborers significantly engage inmicroenterprises. Such enterprises have been mostly important in the provision oflivelihood for socially marginalized people. Human capital formatted through educationand training in the labor force of the urban poor seems to be not adequate for theirsuccessful engagement in self-employment. However, a small proportion of populationin the underserved settlements has been capable of expanding their enterprises beyondthe micro-level. Finally, it can be recommended that all these categories of people in theunderserved settlements need the help of education, training and micro-financing eitherfor maintaining their enterprises as a livelihood or expanding them beyond the microlevel.

Key words: Microenterprise, Urban poor, Underserved settlement


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