Informal Businesses

The Informal Sector Enterprise Surveys are produced by the Enterprise Analysis Unit to measure the characteristics and activities of unregistered businesses. These informal businesses are found almost everywhere, yet they are often missing from official records, listings of active businesses, and business-level surveys. The Informal Sector Enterprise ­­Surveys fill this data gap by following a rigorous survey methodology, implemented in ways that fit the unique characteristics of the sector. The surveys use tailored questionnaires and a sampling strategy which is geographically based and which discovers these businesses while also generating representative samples – Adaptive Cluster Sampling. This page provides additional information on the findings, methodology, and coverage of these surveys.

The indicators presented here provide a snapshot of the informal sector based on these surveys. All survey datasets are available from the data portal

The WBES team has recently (as of June 8, 2022) recomputed sampling weights for the Informal Sector Enterprise Surveys, in particular, the recent surveys for cities in India, Iraq, Lao PDR, Mozambique, Somalia, and Zambia. The main revisions involve recalculation for (i) blocks enumerated through strata-crossing (i.e., where enumeration from a given strata expanded into block(s) of a different stratum), and (ii) edge units.


The Informal Sector Enterprise Surveys data can be used to answer these and other policy questions:

  • Who are the entrepreneurs in the informal sector?
  • What types of informal businesses are prevalent?
  • Why are these businesses not registered?

Over 15,000 interviews were conducted through these surveys covering 24 cities in 7 countries since 2015. 


Some recent findings

Looking at recently completed surveys in Iraq (1,996 interviews across 4 cities) and India (10,672 interviews across 9 cities), some patterns emerge regarding the informal sector.

In Baghdad, the main business city of Iraq, the most frequently cited reasons for not registering are not wanting to pay taxes (73%) and entrepreneurs see no benefit to registering (71%).  Forty-four percent of informal businesses cite that they lack the information on where and how to register. 



Across 4 cities in Iraq, there is wide variation in the female composition of the workforce in informal sector businesses.  The city of Sulaymaniyah has more female representation, with the average informal business having women in more than 40% of its workforce. On the other hand, the other 3 cities surveyed have women in 10%  and less of its workforce. 



In India, across 9 cities, the sectoral composition of informal businesses is somewhat similar. Services comprise around 90% of the informal sector, with 60-70% taken by retailers. Manufacturers, or businesses that make goods, constitute approximately 10% of informal businesses.


 


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