Abstract:
This study explores the factors determining the entry and stay of entrepreneurs in
the informal economy in a Least Developed Country (LDC): Tanzania. Qualitative
data from a focus group with six experts, and individual interviews with
two experts and 15 entrepreneurs from the informal economy, were analysed. The
results show that (1) necessity motivations are important for the entry and stay of
entrepreneurs, as well as (2) the unattractive factors of the formal economy (e.g.
degree of excessive regulations regarding high taxes)/attractive factors of the
informal economy (e.g. little procedures, low capital requirements) and (3) low
levels of education possessed by entrepreneurs, emerged as essential. This study
enriches the literature with personal narratives of entrepreneurial activities from
the micro level. Therefore, many detailed factors are revealed of the lives of
entrepreneurs and experts, dealing in one way or the other with the informal
economy.
