Determinants of the Locational Decisions of Informal Sector Entrepreneurs in Urban Zaria

This paper examines the factors that determine the locational decisions of small-scale informal enterprise promoters in urban Zaria. The paper relied on data obtained through the administration of structured questionnaire that was designed to gather information on the relative importance of the locational factors considered by entrepreneurs in making decisions of the enterprise location. For the purpose of this study, Zaria area was divided into seven neighborhood clusters and three clusters were purposively selected for indepth study. The three selected neighborhoods have high density of informal activities. The first step in the survey was the identification of the small-scale informal enterprises in the selected clusters. A purposive sampling technique was adopted in selecting the sampled informal enterprises. The data was analyzed using descriptive statistics, Kruskal-Wallis non parametric test and Spearman Rank correlation matrix. The results indicate that proximity to family was the most critical factor (Mean = 2.83) that entrepreneurs consider in making their locational decisions. The results further indicates that proximity to family members was positively correlated with entrepreneur’s residence (rho = 0.406, p < 0.001). The implications of this result is crucial for urban planning because the location of informal enterprises in residential areas poses serious environmental challenge and disamenity effects to residential clusters that were not designed for industrial activities.