Urban Rwanda presents a unique context for examining informal sector dynamics due to its rapid urbanization and diverse socio-economic landscape. The research employs a mixed-methods approach including semi-structured interviews with small-scale entrepreneurs, focus group discussions with community leaders, and secondary data analysis from government reports and financial databases. Data collection was conducted in urban areas of Kigali, Gisenyi, and Gitarama. A survey among 120 informal sector businesses revealed that 65% reported challenges related to access to finance, while 48% identified regulatory barriers as a significant obstacle. The findings underscore the importance of supportive policies and financial inclusion strategies for fostering sustainable growth within the urban Rwanda informal sector. Policy recommendations include enhancing access to finance through microfinance institutions and simplifying administrative procedures to reduce bureaucratic hurdles faced by small-scale enterprises.