Formalising women entrepreneurs in the informal economy of Kathmandu, Nepal: pathway towards empowerment?

Women’s economic empowerment through entrepreneurship is increasingly being recognised as significant to achieving the Sustainable Development Goals (SDGs). However, women entrepreneurship in developing countries is characterised by an overrepresentation in the informal economy and exposure to high levels of gender disparities. The aim of this paper is to explore whether formalisation of women’s entrepreneurial activities in the informal economy supports SDGs through ensuring empowerment and equality. The research adopt a qualitative research design to explore the empowerment outcomes of the formalisation of women’s entrepreneurial activities in the informal economy of Kathmandu, Nepal. Data were collected through interviews with 30 women entrepreneurs engaged in a mix of formal and informal entrepreneurial activities. By using Mayoux’s (1998) framework of empowerment at the individual, household and community level, the findings show the variation in empowerment outcomes as a result of women’s diverse motivations for engaging in entrepreneurship. Whilst informal entrepreneurial activities improve women’s confidence and life aspirations, they have limited potential in lifting women out of poverty and enable them to significantly challenge gender relations in the society. Formalisation does further empower women at the household and community level but this is primarily the case of younger and more educated women. The research contributes to the debates on entrepreneurship as ‘emancipation’ and more specifically, on whether formalisation contributes to the SDGs by furthering gender equality and empowerment. Formalisation policies need to acknowledge the heterogeneity of women entrepreneurs.