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SME's - The need for more thought by African governments on the informal sector
The importance of a proper informal sector policy.

Other formal approach to informal sector development Related Articles

Ending poverty means abandoning charity and accepting reality
Benin Mwangi, who blogs about doing business in Africa, asked me recently: "should the discussion be about how to get the informal sector to become part of the formal sector or should it be how to cater to the informal sector?" This in an excursion into the morass of African poverty and development. The short answer is: neither; ending poverty has nothing to do with the informal sector.

4.0 The state of women’s enterprises in Tanzania: Support for Growth-oriented Women Entrepreneurs in Tanzania, 2005
Currently, there is no comprehensive data on the number of women in the MSME sector, the size of their enterprises, or their distribution by sector. Only proxies are available. In NISS (1991) women accounted for about 35 per cent of informal enterprises. By 1995, it was estimated that the proportion of women in the sector could have risen to 70 per cent of the informal sector labour force. In a 2000 Economic and Social Research Foundation (ESRF) study, 55 per cent of the enterprises in the sample were owned by women (as reported in Mlingi, 2000, p. 89). Swisscontact (2003) estimated that women owned 43 per cent of MSEs.
4.1 The situation of women in MSMEs: Support for Growth-oriented Women Entrepreneurs in Tanzania, 2005
Key informants confirmed findings from the literature – that women are predominantly found in informal, micro level, and low-growth sectors, and encounter high competition while earning subsistence incomes. Seriously encumbered by their low levels of education, women are unable to find employment in the formal, private sector, and are the first to lose their jobs in retrenchment exercises. Of necessity, they are driven into entrepreneurial activities.
10.2 Pre-start-up training: Support for Growth-oriented Women Entrepreneurs in Tanzania, 2005
Data from a 1997-98 training needs assessment of informal sector operators found that over 75 per cent of informal sector operators had primary education, while only seven per cent had attended vocational training courses. Most had acquired their skills in a variety of trades through apprenticeships or directly from their peers, but were unaware of the theoretical aspects (reported in Mlingi, 2000, p. 81). Only 5.3 per cent of the MSEs in the Swisscontact (2003) study had received any entrepreneurship training, and even fewer in new product technologies or costing and pricing. This suggests that most MSEs are “learning through trial and error” or from the practical know-how of other operators.
1.0 Introduction: Microfinance in Africa - Experience and Lessons from Selected African Countries
Small enterprises and most of the poor population in sub-Saharan Africa have very limited access to deposit and credit facilities and other financial services provided by formal financial institutions. For example, in Ghana and Tanzania, only about 5–6 percent of the population has access to the banking sector. This lack of access to financial services from the formal financial system is quite striking, when one considers that in many African countries the poor represent the largest share of the population and that the informal sector is an important part of the economy.
2.1 The CommunityBased Approach in MFI Development: Microfinance in Africa - Experience and Lessons from Selected African Countries
An approach commonly followed in African countries has been to rely on local communities to support the development of MFIs, outside the formal banking sector.
2.3 Looking for Financial Sustainability: Microfinance in Africa - Experience and Lessons from Selected African Countries
The technologies described above, based on the formalization of informal techniques and on group-based instruments, have been used to promote financial sustainability of MFIs. They have the advantage of addressing a number of problems faced by financial institutions when operating with the poor or with the informal sector, for example, asymmetry of information, lack of collateral, and difficult enforcement of legal rights.
4.1.2 Enterprises with growth potential: The demand for training
Most training strategies in the informal sector have targeted manufacturing microenterprises that are considered to have some growth potential. However, even within this relatively better-off segment of the informal sector, the effective demand for training has frequently been found to be quite limited.
7.3.2 Training as a basic social service: Mainstreaming skills development for the poor
Redressing inequities and under-provision in the formal education system is of vital importance, both for achieving a more equitable allocation of jobs in the formal sector for women and other disadvantaged groups and, more widely, for sustained poverty reduction.

The Skills Development Strategy in South Africa
The recently introduced Skills Development Strategy in South Africa seeks to cater for the training needs of both the formal and informal sectors.
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