Dissertation (MA Development Studies)This study, aimed at examining the contribution of the informal sector to youth poverty reduction. By analyzing the contribution provided by the youth as well as other stakeholders and the government, the study also intended to assess the trading situations of small scale trade which could influence and hence impact the level of youth participation as well as their contribution in the informal sector. The study was conducted at Mbugani and Mirongo Ward of the Nyamagana district in Mwanza region July, 2015. A cross-section research design was opted. The study, involved 100 respondents, from the selected streets and 6 key informants were chosen totalizing 106 of the selected sample to the field area. Data was collected by using questionnaires and interviews from the respondents. Data analysis was done using SPSS 16.0 version and Ms excel. Results of the study show that, the informal sector has employed a large number of youths. Youth are employing themselves in this sector though there is little support from government and private institution. Financial institution, are the only ways which have helped youths to acquire their initial capital thus there is a need for financial institutions to reduce their interest rates to attract more youths, on the other hand, the procedure for getting loan from these financial institution are not well known to the majority of youths hence there is a need to provide education so as to create awareness of these procedures. From the study findings it is recommended that legal measures should be taken against the government officers and other stakeholders in the ward level who are found to be involved in fraud. In order for the informal sector to grow faster youths should be involved in decision making and comprehensive support from the government should be established to the informal sector which could ensure proper training and technical support to youth in the informal sector.