This study examines the interaction between law and practice in the informal sector of urban Angola. Qualitative research methods were employed, including semi-structured interviews with MFIs’ representatives and community members, document review, and participant observation. MFIs reported significant challenges due to inconsistent legal frameworks, leading to frequent financial difficulties and client dissatisfaction. Specifically, three-quarters of respondents faced issues related to regulatory compliance and licensing requirements. Current legal structures impede the growth and sustainability of MFIs in Angola's urban informal sector. Policy recommendations include harmonizing existing laws with international best practices for microfinance and improving enforcement mechanisms.