Kenya's informal sector comprises those enterprises employing 20 or fewer people - whether or not they operate from a fixed location. Thus a self-employed handcart puller, hawker, a vegetable vendor (mama mboga) or shoe-shine boy are all treated as individual 'enterprises' even though they have no employment and no fixed location. These enterprises make up a totally varied group whose interests cannot possibly be put down in any one combined statement of policy.

The informal sector plays an important part in the economic, political and social life of Nairobi. The importance of this sector can be gauged by its role in employment creation in an economy where the unemployment problem has reached crisis levels. In 1992 only 91,300 job opportunities were created nationally, of which 75 per cent were generated in the informal sector. According to the Central Bureau of Statistics (CBS), the sector accounts for 27 per cent of total employment in Nairobi, (141,877) out of total employment of 517,877). Furthermore, growth in the informal sector is occurring at 16 per cent per annum compared to 1.4 per cent in the modern wage sector.

The informal sector requires very little per capita input to create jobs - Kshs. 160,000 compared to Kshs. 1.2 million required by the formal sector. The sector also requires less expensive infrastructure to flourish, it conserves scarce foreign exchange, and still depends largely on local raw materials. From a political point of view, most of Nairobi workers are part of the informal sector. The sector plays an important social role by absorbing youth in employment who may otherwise be involved in socially deviant activities. It also promotes a strong work ethic, and therefore the training ground for tomorrow's industrialists.

The Business people who benefit from WAC's micro credit loans operate wholly within Nairobi's informal sector.