ABSTRACT
This chapter reviews policies frequently used in assisting the informal sector and examines the way they affect the rate of technological capability accumulation. It discusses the effect of policies on credit, training and provision of infrastructure on informal sector technology. The informal sector, which cuts across all industries and services, is extremely heterogenous. In developing countries, the promotion of the informal sector is being increasingly recognised as a component in any economic recovery programme including the World Bank/International Monetry Fund’s structural adjustment programme. The main objective of most policies for the informal sector is primarily to increase productivity, growth potential and the incomes earned in the sector. Informal sector industries seldom have access to loans from commercial banks or other financial institutions. There are two categories of credit policies relating to the informal sector: those that favour working capital and those that favour fixed capital.
