en
Areas of Expertise

Informal Economy

Informal Economy
© ILO/M. Crozet

Nadine, a rural entrepreneur

Nadine owns a sewing business in a small rural town.  She hires two workers on a regular basis and usually another three to four workers during the peak season. As productivity rises, she is thinking of expanding her operations. She has just obtained a loan from a private bank and she also gets the support from a local women business association. 

A while ago Nadine decided to formalize her business in order to make it grow and access new markets. She registered her business with the municipality and with the Chamber of Commerce. She has also registered two of her employees who now get full labour benefits. This comes as a cost but brings also benefits: she thinks that the security and well-being of her employees have contributed to a higher productivity for her business. At times she gets annoyed with the time she has to spend on the administrative work related to the payment of the social security contributions each month, but she is quickly learning and spends less time on it every month. 

The situation, however, also produces some jealousy amongst the temporary workers who join the firm during the peak season and who don’t have any social protection benefits.  Recently, one of them had an accident at the work floor, which was not covered by insurance, meaning that Nadine had to cover part of the hospital expenses. Nadine, however, considers that the cost of formalizing all of her workers at once cannot yet be covered by the income generated by the business. 

 

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