Surviving on the Margins: A Structured Systematic Review of Micro Informal Business, Poverty, and Livelihoods in Kenya
Abstract
Micro informal enterprises employ the majority of Kenya's working population, yet most of them do not grow. They persist. This review asks why, and it reads the evidence through a survival-and-poverty lens rather than a growth one. Following a structured, PRISMA-informed protocol, it synthesises peer-reviewed studies, national statistics, and grey literature on Kenya's micro informal sector — the jua kali artisans, street vendors, mama mbogas, kiosk owners, and boda boda operators who make up the country's real labour market. Three findings stand out. First, the sector is defined by survivalist logic: most firms exist to smooth household consumption, not to accumulate capital, and their scale reflects risk management, not a lack of ambition. Second, the binding constraints are structural and mutually reinforcing — thin capital, unsafe savings, insecure trading space, harassment by county enforcement, and near-total exclusion from social protection. Third, the interventions promoted as solutions, from mobile money to state credit, have delivered real but uneven gains; mobile money moved households out of poverty, while flagship state credit largely financed consumption and defaulted. The review concludes that formalisation, framed as registration, misreads the problem. What survivalist enterprise needs first is security — of savings, of space, and of income against shocks. Policy that starts there will do more for the poor than policy that starts with a licence.
Key findings
The sector runs on survival, not growth. Most micro informal firms exist to keep a household fed, not to build capital — so their small size reflects rational risk management, not a lack of ambition.
Unsafe savings bind harder than scarce credit. A safe place to store money raises investment more than a loan does; credit pushed at a household with no buffer tends to become consumption, and then debt.
Insecure trading space is economic policy, not just urban management. Harassment, eviction, and extortion by county enforcement act as a regressive tax and stop vendors investing in their own pitches.
The poorest firms are the most exposed to shocks and the least insured. With only about a tenth of the population covered by any contributory social protection, the firm itself becomes the household’s only shock absorber.
What works is security, not registration. Mobile money and safe savings cut poverty by making households more resilient, while flagship state credit (the Hustler Fund) largely financed consumption and defaulted.