WHAT SOW THE SEEDS OF HARDSHIP FOR THE POOREST OF THE POOR? TOWARDS INCREASING THE PERFORMANCE OF INFORMAL SECTOR IN WAR AFFECTED REGIONS OF SRI LANKA

Less performance of informal sector among the poorest of the poor in the war affected regions in Sri Lanka has been caused by many reasons. Findings of an exploratory study and the factor analysis revealed four important factors namely training and skills, education, social and economic. As the extension of the exploratory study, to test this prediction empirically with a larger sample size, the present study applied a survey method using a questionnaire especially designed based on the initial exploratory study which was conducted inductively. A sample of 300 women headed households engaged in the informal sector participated in this study. The results indicates these four factors significantly predict the performance of informal sector. More specifically, while, economic factors contribute more to the performance of the informal sector, training contributes less. The study also discussed the implication of findings and area for future research. Based on the findings and conclusions, few recommendations are also made to enhance the performance of women headed households in the informal sector.

Introduction employment, majority of both males and. females are employed working in the informal sector. But however when comparing the women employment out of the 2.8 million women who are employed 53.9% of them are in informal sector. This is presented in Table 1 Engagement of females in small business and informal sector is comparatively higher.
However, it seems that the performance of this sector is not to the expected level due to many reasons. According to Fridah (2012) it is evident that, women tended to operate smaller enterprises than men. According to some studies the evidence have been provide of female underperformance (Brush 1992;Rosa et al., 1996), but in some other studies they do not find gender-based differentials (Du Rietz & Henrekson, 2000;Bardasi, 2007). So the study findings depend in part on what measure of performance is used and what are the other factors controlling the outcome. A study conducted by ILO (2003) regarding women in growth enterprises found that 70 per cent of the women entrepreneurs currently engaged in small enterprises had started them as microenterprises and grown them over time. There are several evidence showing that female owned enterprises are smaller in terms of employment, sales, and assets than male-owned enterprises (Coleman, 2007;Robb, 2002). Some studies also indicate that firms owned by men are more profitable than women owned business. Bosma et al. (2004) found that male Dutch business owners outperformed women in terms of profit. Robb and Wolken (2002) studied a sample of white-owned small businesses in the U.S. and show that women owned businesses generate only 78% of the profits generated by maleowned businesses.
The case still worse among women headed households. It is often presumed that women and children suffer greater poverty than in households which are run with the help of a male-headed arrangement by this the most common phrase which is spoken among people is that female-headed households are the 'poorest of the poor'. In addition, this might not only compromise the physical well-being of children, but other privations on emotional, psychological and social wellbeing of the family. Beyond affecting young people in the short-term, these are also deemed to sow the seeds of future hardship (Chant Sylvia, 2007). This has been supported by many evidence. 'Women-headed households are overrepresented among the poor in rural and Source: Sri Lanka Labour Force Survey Annual Report -2014 urban… developing and industrial societies' (Bullock, 1994, p17-18). 'One continuing concern of both the developing and advanced capitalist economies is the increasing amount of women's poverty worldwide, associated with the rise of female-headed households' (Acosta-Belén & Bose, 1995, p.25). 'What is clear is that in many countries women tend to be over-represented in the ranks of the "old" or structural poor, and female-headed households tend to be among the most vulnerable of social groups'. Graham (1996)

Skills, Training Factors and Performance
Many researchers have identified training factors as an important element influencing the performance of an enterprise at any level. Samiti (2006) and Tan (2000) (2002) shown that women entrepreneurs in MSEs in Amhara region are constrained by the lack of sufficient training. Eshetu and Zeleke (2008), ILO (2003) found that women entrepreneurs in Ethiopia had shortage of technical skills and poor managerial skills and women entrepreneurs in Ethiopia lack on marketing skills on knowing how to market their products. Mahbub (2000) identified that women often are unable to market their goods and services strategically because of the lack of access to training and experience in how to react in the market place and to explore new markets they requires expertise, skills and knowledge. Schorling (2006)  are being carried this will ensure the training support is given to this women. Cooper et al. (1992) studied many factors which has an impact on business performance and out of that Human capital (level of education, skills) were identified as one main requirement.

Economic Factors and Performance
When considering the second variable which is economic factors there are many literature supporting the fact that economic factors has an influence in the enterprise performance Samiti (2006), Tan (2000) categorized the fundamental factors that affect entrepreneurs in to two broad categories and was identified as economic.
The economic factors include the following, lack of access to raw material, lack of capital or finance, lack of access to the market and poor infrastructure. Schorling (2006) identified the most pressing problems facing MSEs in Ethiopia are lack of market, lack of capital, shortage of supply of raw materials, no proper working premises and marketing problems. Longenecker, et al. (2006) found that improper financing have been posited as the main causes of failure of small enterprises. Some studies (Oketch, 2000;Tomecko & Dondo, 1992) found that lack of credit was identified as one of the most serious constraints hindering the SMEs development. ILO (2003), SMIDEC (2004) found that difficulties in accessing financial resources and the lack of capital were challenges to enterprises. A similar study by Walelign and Wondimu (2002) showed that women entrepreneurs in MSEs in Amhara region are constrained by lack of finance / capital, lack of market, lack of infrastructure facilities and shortage of the supply of raw materials. Eshetu and Zeleke (2008) stated that, women entrepreneurs in Ethiopia find difficulty in obtaining loan from commercial banks.
Additionally, ILO (2003) found the following many constraints of women entrepreneurs in Ethiopia they are inadequate infrastructure, stiff competition (marketing problems), lack of suitable location or sales outlet (Infrastructure) shortage of raw materials, and shortage of working capital. Fridah (2012) mentioned that Micro-enterprises are specifically vulnerable to competition from counterparts who introduce new products or services, or improve their production processes, lacking the resources to compete in the markets. Jaiyeba (2010) found that lack of marketing skills is a hindering factor for MSEs. ILO (2008) found in a study conducted in Ethiopia, the United Republic of Tanzania and Zambia that women entrepreneurs lack access to formal finance and rely on loans from family and community, the lack of access to titled assets that can be offered as collateral for loans adversely affects the growth of their enterprises. Mahbub (2000) identified that access to finance is a major issue for women MSEs.
Particularly accessing credit, for starting an enterprise. Mainly this because women often lack collaterals. Mahbub (2000)  for their products. They often produce small amounts, due to this they are limited to the local village markets, where the market for their products and services are already saturated, thus become dependent on the middle traders who buy their products at relatively lower than the market price. According to Athanne (2011) women entrepreneurs are facing the greatest barrier in accessing finance due to collateral requirements. Most women who undertake businesses in the rural areas who are in need for financing lack the needed collateral to assist them to get a bank loan. Zororo (2011) and Brush (1992) found that financial aspects of setting up a business are without doubt the biggest obstacles to women.
According to the Common wealth secretariat

Social Factors and Performance
When considering the factors influencing enterprises, many researchers have identified social factors as an important element influencing the performance of an enterprise at any level. Samiti (2006) and Tan (2000) categorized the fundamental factors that affect entrepreneurs in to two broad categories and one was social. The social factors include the  (2004) and Mahbub (2000) identified as women may fear or face prejudice or sexual harassment they are restricted in their ability to travel to make  (2010) also showed that factors such as their family responsibilities sometimes prevented access to some of the opportunities.

Education Factor and Performance
Education is one of the most important factor for any person to service in today's competitive world regarding the informal sector employees to it is the same but when going through the factors influencing the informal sector education has been highlighted as one of the hindering factor for the performance of the informal sector in support to this there are many literature.
Gemechis (2007), Hisrich (2005) and ILO (2009) emphasis added the following as crucial factors that affect entrepreneurial success is entrepreneurship education. As MSEs are business venture is small in size, a simple management mistake is likely to lead to sure destruction of the enterprise so there is no chance to learn from its past mistakes poor management has been posited as one of the main causes of failure of small enterprises Longenecker et al. (2006). Education is one of the factors that impact positively on growth of firms (King & McGrath, 2002), but when they have less education level it will also tern as a hindering factor. The entrepreneurs with high number of human capital, with good education are able to improve their business to a better situation and able to adapt their enterprises to frequently changing business environments.
According to ILO (2003), SMIDEC (2004) found that lack of accessibility to information, knowledge and lack of quality awareness are challenges that affect MSEs. Walelign and Wondimu (2002) (2003) found that lack of market information is a constraint for women entrepreneurs in Ethiopia.
In support of this a review by Desta Solomon As the extension of the study of Rauf and Rukshan (2016), with a larger sample size, to test this prediction empirically, the present study apply a survey method using a questionnaire especially designed based on the initial study by Rauf and Rukshan (2016). As such, this study has developed the following conceptual model and four hypotheses.

Method
The questionnaire developed and validated in the study by Rauf and Rukshan (2016) is used for this study. The questionnaire comprised of two sections: Section A comprised the   Correlations between the independent and dependent variables of this study are given in   The third model also included Social which resulted in an additional 4%. Of variance  This imply that more forces should be given to According to the study findings education also has its influence on the performance of the informal sector as it was evident a less educated person finds it hard to manage a business while a person having a higher education level finds it much easier to handle and operate the business, so more emphasis should be given to increase the education level of the participants in the informal sector. However at present the need for education has been realized and mostly all children are been sent to school by their parents other than exceptional cases so the generation who is already in the informal sector has the need to improve their education level, so if some additional basic educational programmes could be conducted specially for the informal sector enterprises it will help the business to perform well, in future if the school syllabus will also have some business generating idea it will help the country to develop rapidly.

Findings and Conclusion
Realising the effective functioning of the informal sector and its contribution to the Sri Lankan GDP, this study has set out the main objective as to identify factors that influence To enhance the performance of women entrepreneurs in the informal sector based on the findings and conclusions of the study, the following recommendations are forwarded.
As the major issue identified access to finance, this should be created at an essay access mode.
The banks of Sri Lanka though they have good schemas existing, when it comes to the ground level due to the individual perceptions and not wanting to face risk and safe guard their jobs the bank staffs don't tend to motivate MSEs to obtain these loans. This perception should be changed and people should be encouraged to obtain these loans without going into the informal credit schemes which are dangers and expensive due to high interest rates.
The micro credit institutes also should consider their interest rates, as when it is compared with the bank interest it seems very high. Micro credit institutes and banks should give away loans with a grace period which will help the beneficiaries to start or expand their business and then start paying as in most of the case it is the other way before getting the outcome of the investment they start paying for the loan this should be changed as this too burden the person and due to this also some don't obtain for a loan. Collaterals are also another problem for many as especially the poor people don't have that kind of security, so they are unable to get access to finance. Some special systems should be considered. It could be suggested that donors, funding agencies, NGOs or the Government without giving away in kind support they could keep a huge deposit as collateral in the banks and give away loans for these MSEs. there is no proper interior roads, electricity as due to this they find it hard to get raw materials as well market their products. Good insurance schemes should be created and all enterprises should obtain an insurance policy as this will give a protection to these beneficiaries as some times due to manmade or natural disasters always the small businesses find it hard to recover.
More marketing linkages should be created especially try to get international linkages for an example some NGOs have got links from outer countries and exporting handmade batik, handicraft items, handloom so these kind of linkages will help some businesses. Vocational training institutes should change their training programmes to meet the demand of the market but most of the training programmes are conducted depending on the equipment available at these institute so market surveys should be carried out and then training programmes planed.
Recognition of prior learning (RPL) system should be given to all enterprise this is a system though a person has not gone to a formal vocational training he could sit for a practical exam and obtain a national vocational qualification (NVQ) this will help him or her to show case his talent as many are requesting certificate to prove a person's qualification before obtaining a service so this will give recognition as well to obtain government projects NVQ certification is a must requirement. To bring about enterprise development to the educational system where children will be getting the idea generated at their young age and they could prepare a career on that field. Some basic educational programmes should be introduced to enhance the basic education for the informal sector participants who don't have the basic education, this will be a challenging process, as the commitment level could be less from the participants however some regret that due to the war and been displaced often they couldn't continue their education so people like this might join and benefit from it.
Women entrepreneurs in MSEs in Vavuniya division should share experiences with other entrepreneurs in other division and or towns or districts so that they can learn a lot from best practices of those entrepreneurs. Medical assistance and check-ups should be mandated for employees as this will help the productivity life span increase as well special the hygienic conditions will improve which will help the business activities.
This study will help the society in many ways, as this study has found the factors training and skills, social, economic and education as mostly influencing the informal sector this will help the people who are directly benefiting from the informal sector to concentrate in these factors as it will help them to improve their performance if they give priority and improve these factors. At the same time NGOs and government institutes working in this field could use these findings as a base to prepare future projects. As in the introduction it way mentioned that because not knowing the actual factors influencing the informal sector large amount of money has been spent to help the beneficiaries in this sector so by using these NGOs or the government officials can create a better project to suite the beneficiaries.
This will be an awakening call to the banks and the micro finance institutes as they can understand that their products have not reached the needy. This study would help the government to prepare better plans for the future in developing the informal sector. Finally this study would help the future researcher for literature as many of the studies are been conducted in other countries and not in Sri Lanka so this will be used during studies under the Sri Lankan context as well for general studies. This could be as a guide line as the factors were found from the respondents them self so they could use these factors as well other factors which were eliminated due to less responses for future studies.
As it is evident from the data findings the four factors identified through this study are influencing a major part in the informal sector performance, other factors also could influencing the performance of the informal sector and they have not been identified this will be an option for future studies. At the same time this study has been conducted at the Sri Lankan content in the war affected region where in another country or in another region which was not effected by war might have other factors influencing as this could be considered as for future studies. More over the researcher had selected women headed households as the respondents other respondents might have different opinions this also could be considered for future researches. In the first study the researcher excluded some factors as they didn't have significant respondents supporting them but in other regions these might be the major factor influencing so this also could be considered. Future research could be conducted with additional factors add to these four factors.
What Sow the Seeds of Hardship for the Poorest of the Poor? Towards Increasing the Performance of Informal Sector in War Affected Regions of Sri Lanka