What is Informal Traders

Zambia's efforts to create a viable SME sector – after the successes of SMEs in Southeastern Europe faces numerous constraints. The nature of the informal trade sector in Zambia and how the same would provide implacable complexities for the envisaged policy framework has not been determined. This chapter explores the nature of the informal trade sector in Zambia and the implications of its nature on the new policy framework. This chapter based its argument on a case study conducted in Makululu Compound in Kabwe amongst small-scale informal traders (n=99). The majority of informal traders operated individually-based, unregistered, non-tax compliant activities to create self-employment and generate household income. The larger majority of the traders were unwilling to move from informal trading to the envisaged SMEs. Policymakers should not abruptly replace informal trading with SMEs as envisaged. Instead, informal trading should be allowed to co-exist with the envisaged SMEs.