Women Entrepreneurs in Informal Sector

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The informal financial system is defined as consisting of those economic activities, units, enterprises and workers include both professional and non professional who take part in business activities outside of the realm of the formally established mechanisms for the conduct of such activities and are therefore not regulated or protected by the Government. It includes all form of unregistered and unincorporated micro scale productive transaction, financial and service activities, and is also consist of all types of employment without protected contracts, worker benefits or social protection both internal and external informal enterprises. The informal sector is encompasses as an important element in the financial activities and also process of development in each economy (Hope, 2014).

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The informal sector is providing employment opportunities for both male and female. Every person is trying to start their business to overcome their deficiencies of their life and they are getting loans from their friends, relatives and from other informal sources. The person who starts his own business is known as entrepreneur and the process is called entrepreneurship. Entrepreneurship is a growing concern of recent financial system and its involvement in any economy is important worldwide. The process of development in any country need to develop equal participation of all citizens including female but entrepreneurship is considered as male gendered concept in Pakistan. Entrepreneurship development among women will strengthen the national economy and also reduce their unemployment and poverty. Micro entrepreneurship is a source which make women sustain their empowerment and sovereignty (Maheswari, 2017).

The role of entrepreneurship has been increasing from last few decades. A large number of women are entering into micro entrepreneurship to increase their standard of living and to fulfill their basic needs. The one reason is that through entrepreneurship they can overcome their subordination within the family and in the society as a whole (Khandare, 2016). Entreprenureship play a very important role in development of nation. Women are becoming entrepreneur because of their skills, knowledge, talents, abilities and desire of to do something for themselves and for their children and family. The government has also offered a variety of programmes for women entrepreneurs in the recent past. Micro finance is the provision of financial services to low income clients and also the provision of micro credit or loans to business people with good and profitable finance.

The participation of female micro entrepreneurs are rapidly increasing over last few decades and studies highlighted women entrepreneurship is one of the key provider for economic development. More than 126 million women entrepreneurs were starting or running their new businesses in 67 economies in 2012, according to the Global entrepreneurship monitor (GEM) 2012 women’s report. Women plays very important role in development of any nation. Women are becoming entrepreneur because of their skills, knowledge, talents, abilities and desire of to do something for themselves and for their children and family but for doing all this they need micro finance to start their work. Women are working in both formal and informal sector but they are facing a number of challenges in informal sectors. Women are entering in informal sector due to their low standard of living and low income level. The phenomenon of women in entrepreneurship in the informal sector has largely been neglected in society because the concept of entrepreneurship is discriminatory and gender biased.

Women entrepreneurs in informal sector are needed to be studied separately for many reasons. The one reason is that they are creating their jobs for themselves and for others. They also provide the society with different solution to management, organization and business problems as well as to the exploitation of entrepreneurial opportunities. And the other reason is that women entrepreneurs have been neglected largely in society and they are facing challenges in doing their business especially in informal sector. Further the last and important reason is that a large number of studies are done on entrepreneurship in different regions included.

In all these studies female entrepreneurship and its challenges, prospects are discussed but there is no focus on informal sector where women are facing a lot of challenges and prospects. So there is need to investigate these challenges and to examine how female are overcoming challenges in informal sector. Keeping in view the power of the phenomena, researcher is going to carry out our work on the topic “Challenges and Prospects of Female micro-entrepreneurs in Informal Sector”. So this topic is highly valuable and researchable as well. It has a strong significance and this problem is having significance in all societies. It should be study further in detail as well.


Entrepreneurship is essentially a creative activity or it is an innovative function. The process of innovation may be in the form of:

Introduction of new product

Use of new methods of production

Opening of new market

The conquest of new source of supplying of raw material

A new form of organization (Schumpeter, 1934).

Entrepreneurship means an innovation that is introduction of a new good or of a new quality of good, a new method of production, the opening of a new market, the conquest of new source of supply of raw materials or half-manufactured goods, as well as the carrying out of a new organization of an industry (Schumpeter, 1926).

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