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forward linkages on fair terms between largerand smaller firms;• Promotion of market access and fair trade forsmaller firms and enterprises;• Social protection of informal operators throughproperty, health, life, disability insurance;• Adequate and relevant retraining, life-longlearning, and other support to labour mobility.Pillar 4: Broaden access of informal businessto financial services and support innovation infinancial products and processes. This requiresthat there be:• Awareness in both formal and informal creditsystems of the way the working poor use creditand the barriers and often inappropriate rulesin formal lending procedures;• Legal and administrative processes in placewhich make the processing of collateral includingsocial collateral cheaper, transparent andfaster;• Legally recognised and mutually negotiated riskmediation processes in place for both the lendersand borrowers from informal business;• Support to innovation in financial products andservices with a view to deepening their outreach.Pillar 5: Engage in evidence-based reform.There are now hundreds of good practice examplesthat illustrate how the constraints of informalbusinesses have been successfully addressedaround the world. These examples should bestudied and the lessons learnt should be groupedaccording to what constraint or need was beingaddressed and the policy lesson drawn from theexperience. The policy reform that ensures shouldbe participatory and targeted to the realities of thedifferent sub-sectors in the informal economy.ConclusionsThis report has outlined how the process ofachieving greater legal empowerment (throughbusiness rights and access to the advantagesof formalisation) can and should take differentforms. Incentives to encourage informal entrepreneursto actively engage in the change processmust show actual benefits to their livelihoods andtheir well-being. These incentives are essentiallywhat would result if the barriers to entry intoand/or interaction with formal and legal economicactivity were addressed. Incentives could be inthe form of• Simplified registration procedures and progressiveregistration fees;• A supportive investment climate and a businessenabling environment;• Fair commercial transactions between informalenterprises and formal firms;• Appropriate legal and regulatory frameworks,including: enforceable commercial contracts;private property rights; more equitable use ofpublic land; and tax-funded incentives, suchas government procurement, tax rebates, taxfundedsubsidies, and incentive packages.These incentives would have to be supported atthe same time by appropriate and customisedfinancial, business development, and marketingservices. Mechanisms and financing arrangementsto provide social protection to informalproducers have to be put into place and policyand institutional reform undertaken in a participatorymanner. The participation of informal entrepreneurs,both women and men, would be bestensured through proactive and iterative dialogue— on an ongoing basis — with representatives ofassociations of informal entrepreneurs.265