Street vendors’ intentions to conduct formal business in Tanzania

The behavioral transformation of street vendors from informal to formal business practices is an important step toward broadening the tax base and addressing revenue leakage. Beyond the fiscal aspect, the study conceptualizes venture formalization as a multidimensional process linked to enterprise legitimacy, access to finance, social protection, and business growth. This study assesses street vendors' intentions to adopt formal business practices in Tanzania. Drawing on the Theory of Planned Behaviour (TPB), the study extends the framework to incorporate contextual factors specific to the informal and formal economies, notably legal and institutional frameworks. A closed-ended questionnaire was designed to collect data from 700 respondents in four Tanzanian cities: Dar es Salaam, Mwanza, Arusha, and Mbeya. The collected data were analyzed using descriptive statistics and Covariance-Based Structural Equation Modeling (CB-SEM). The study found that attitudes toward formalizing street vending and subjective norms regarding the formalization of street vending have a positive and significant influence on street vendors' intentions to engage in formal business practices. Conversely, perceived behavioral control over formalizing street vending has a negative influence on street vendors' intentions to formalize their businesses. These findings highlight the need for awareness campaigns, community-led advocacy, and support mechanisms such as training and financial aid to encourage formalization. By applying the Theory of Planned Behaviour in a Tanzanian context, this study addresses the behavioral factors influencing street vendors’ intention to transition from informal to formal business practices. Additionally, by highlighting the influence of subjective norms, attitude, and perceived behavioral control, the study offers context-specific evidence that can inform the design of policy interventions aimed at promoting voluntary formalization and inclusive economic growth.