Financial term of the Week

THE informal sector is part of the economy that is neither taxed nor monitored by any form of government. It is often characterised by small businesses, self-employment and cash transactions. The informal sector is a significant part of many economies, especially in developing countries.

There are many reasons people work in the informal sector.

Some people may choose to work informally because it allows them to avoid paying taxes or complying with government regulations.

Others may work informally because they are unable to find formal employment.

The informal sector can be a valuable source of income and employment for people who are marginalised or disadvantaged.

However, there are also some drawbacks to working in the informal sector. Informal workers often lack access to social protection benefits such as health insurance and unemployment benefits.

They may also be more vulnerable to exploitation and abuse.

The informal sector plays an important role in many economies.

It provides employment and income for millions of people, and it contributes to the production of goods and services.

However, it is also important to address the challenges faced by informal workers, such as lack of social protection and vulnerability to exploitation.

The informal sector is a complex and diverse sector, and there is no one-sizefits-all approach to supporting it.

By taking steps to address the challenges faced by informal workers and businesses, we can help to create a more inclusive and equitable economy.