Identifying Flood Vulnerability Factors of Informal Sector Businesses in Sri Lanka
DOI:
https://doi.org/10.47604/ijes.3660Keywords:
Flood Vulnerability, Informal Sector Businesses, Business Registration, Flood Mitigation, Insurance, Sri LankaAbstract
Purpose: Informal businesses contribute to more than half of employment and livelihoods in developing countries, but we do not know much about the extent to which natural disasters affect them. In Sri Lanka, informal businesses arguably represent 96% of commercial establishments although there have been questions about who they are and their flood vulnerability in terms of loss and damage. This paper attempts to better understand informal businesses of Sri Lanka with more details, revealing current data discrepancies. It also clarifies what factors affected past flood loss and damage.
Methodology: To better understand informal business owners’ perceptions about flood vulnerability, we conducted a questionnaire survey among 180 small business owners in Colombo and Gampaha districts from February to March 2023. The questionnaire was designed based on the vulnerability function developed by IPCC and had 32 questions. The participants were randomly selected from six divisional secretariat divisions (DSDs) in each district. Additionally, interviews and online discussions were conducted among the main government stakeholders before and after the questionnaire survey. The data were analyzed using Microsoft Excel and SPSS and presented in descriptive forms, including tables, figures, and graphs.
Findings: The results show that Gampaha business owners had relatively higher flood vulnerability than Colombo, mainly due to low education achievements, single-owned businesses, lower annual turnover and asset value and lack of mitigation measures. We found that business registration practices at government agencies played a significant role in leaving many businesses informal, and our survey shows that only 16.7% in Colombo and 12.2% in Gampaha had operated registered/formal businesses. We calculated an annual average flood loss and damage among these businesses to be in the range of LKR 50,000-100,000 per business. Those businesses that had experienced higher loss and damage exhibited low disaster risk awareness/preparedness and financial difficulties. Our factor analysis found that education, ownership and size of businesses, registration status and availability of government compensation led to regional differences in terms of flood preparedness and vulnerability.
Unique Contribution to Theory, Practice and Policy: This study shows the specific vulnerability factors faced by informal business owners in dealing with floods. To better reflect the community vulnerability to floods, it is recommended to incorporate the above vulnerability factors in disaster loss and damage assessment and related policies and strategies. Further, it is necessary to adopt a more flexible framework for business registration and formalization to minimize disaster vulnerability.
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