Abstract

Hardly any research is available regarding women entrepreneurs in the informal business sector in Eritrea. Results based on a survey of 1,607 women drawn from 12 cities in 6 regions indicate that in setting up an informal business the main sources of initial capital are: the owner’s cash savings; loans from friends and relatives; and interest free credit from suppliers, based on trust. On the positive side, half of the survey respondents indicated that their initial capital had increased since startup, while a significant number stated that it had remained the same, and in a few cases respondents indicated that their initial capital had decreased. Furthermore, it has been noted that Ukub (Rotating Saving and Credit Associations),  a form of non-interest bearing savings is a traditional way of network for saving money. Since the majority of the respondents indicated that they purchase their merchandise/raw materials from the formal sector, these informal businesses are assisting formal businesses by serving as important channels of distribution. However, the evidence also reveals that a lack of funds, a lack of demand for products, high cost of materials, and municipal and national laws (and regulations) governing the informal sector represent key problems faced by informal business owners. 

Key words: Women, informal sector, financing, networking, economic empowerment, Eritrea.