The consequences of urbanization in Sub-Saharan Africa are poverty, insecurity, and the growth of informal settlements. These settlements are characterized by overcrowding, tenure insecurity, a lack of basic services and amenities, and many other deprivations. The current study looks at the social and environmental problems faced by residents and the factors responsible for their choice to reside in an informal settlement in Enugu using the survey research method. Primary and secondary data were utilized in the study. Whereas the former source includes a structured questionnaire and observations, the latter source comprises relevant literature. A total of 111 questionnaires were distributed to household heads in five selected informal settlements in Enugu. The data set was collated and analysed using descriptive and inferential statistics. Principal component analysis was used to classify and determine the factors influencing the choice to reside in an informal settlement. The study revealed that six factors influence the choice of residence in informal settlements: government/political influence, social integration/services, housing/employment, infrastructure accessibility, livelihood costs and security/economy. The factors accounted for 72.11 percent of the factors influencing the choice to reside in an informal settlement. The major social challenges faced by residents are gambling, drug abuse, and overcrowding. The study recommends that low-cost housing that is affordable should be provided for the low-income group that characterizes informal settlements in Enugu metropolis.