The Impact of Flood Hazard on Small and Medium Entrepreneurs in the Ratnapura Divisional Secretariat Division, Sabaragamuwa Province, Sri Lanka

Abstract

The direct and indirect impacts of natural hazards are affecting trade activities and their stability all over the world. Small and medium-sized entrepreneurs (SMEs) are affected comparatively higher than large scaled entrepreneurs in Sri Lanka, as they are relatively resource necessitated and less able to recover from the impacts. The present study assesses the detrimental experiences with flooding and will provide valuable knowledge for fostering entrepreneurial resilience in future events. Thus, this study aimed to investigate the full range of both long-term and short-term impacts flooding experienced by SMEs in the Ratnapura Divisional Secretariat, Sabaragamuwa Province, Sri Lanka following the floods of May 2017. The flood-affected 500 SMEs were surveyed during the study. The optimum sample number for the survey was calculated by Cochran formula, and 96 SMEs were randomly selected from the flood affected SMEs. Primary and secondary data were collected in preparing the five-point Likert scale questionnaire that was carried out individually with respondents of each SMEs. The Relative Importance Index (RII) was used to rank the impacts on SMEs. The main finding in this study within short-term impacts is that the stocks were severely damaged (RII=0.891) and following that property damage (RII=0.833) is highly affected to SMEs. Under Longterm impacts, disrupted cash flow (RII=0.858) and structural damages (RII=0.795) extremely affected the SMEs. Since flooding has seriously damaged the public infrastructure system, entrepreneurs have to obtain alternate or emergency logistic support from the government as well as insurance claims to run their operations. Therefore, the findings of this study propose some strategic plan and policy framework and adaptations for disaster risk reduction among SMEs in Sri Lanka.