Dissertation (Masters of Business Administration)The informal economy is characterized by less job security, lower incomes, an absence of access to a range of social benefits and fewer possibilities to participate in formal education and training programmes. There are several factors which need to be study that limit informal sector workers’ contribution to pension schemes. This study aimed to examine factors influencing informal sector worker’s contribution to pension scheme. Specifically, addresses perception of informal workers towards institutionalized social security schemes, factors that influence informal workers’ decision to participate in a social security schemes, challenges and constraints for informal workers in social security schemes. Information from this sample size were collected through questionnaire to capture the study themes. Descriptive statistics such as frequencies and percentages were used to summarize the socio-economic characteristics of the drives and constraints to participate in social security scheme. The knowledge and perception towards social security scheme were analysed using frequencies and percentages through five point Likert scale. Heckman two stage approach was adopted in analysing the data collected from 170 informal sectors employees in Dodoma City. The findings show that, Benefit provided by the social security funds are strong force to encourage informal sector employees. Government policy once are clearly formulated could encourage social security funds to provide relevant products in the demand of informal sector employees. Informal sector employees are limited with accessibility of social security funds due to lack of respective information on the operation of social security institution.