This study focuses on the situational analysis of the informal sector in the three major cities in Malawi. An extensive literature study was undertaken to understand the origin of the informal sector and how it has grown in the business environment to which it is exposed in Malawi. This understanding was essential because it formed the basis for conducting the whole research. Focus was made for both the formal and the informal sectors to see whether there was a clear linkage between these two sectors. An examination of the business environment in which the informal sector was operating was done in order to understand the push and pull factors affecting this sector. The findings provide unique explanation of why this sector is growing and how difficult it has been for government and politicians to manipulate it. The findings also point out the different business approaches that are used and how both informal and formal loans have been acquired in order to enhance this sector. While it is seen as a disorganized sector, the findings point out to the organization that this sector has and contrary to the thinking that it is easy to enter one would need to read this book to learn more