The development of a support framework for informal entrepreneurship in uMhlathuze Local Municipality, KwaZulu-Natal Province, South Africa

The significance of informal entrepreneurship and the value of informal entrepreneurs have been widely acknowledged considering South Africa’s socio-economic challenges and the country’s economy’s incapacity to generate formal employment opportunities. These challenges emanates from several factors, which includes the legacy of apartheid, poor education system, Covid-19 regulations, and corruption on economic system. South Africa's extreme poverty and high unemployment rates have made it more necessary than ever for unemployed people to engage in informal entrepreneurship to support themselves and provide for their households. The South African government recognises the significance of small businesses in the economy and has set up both financial and non-financial support measures to support them become self-sustaining. However, research seems to indicate that there is still room for improvement, particularly regarding informal enterprises. This study argues that they is little scholarly attention that has been given to support mechanism for rural informal entrepreneurship. This constitutes a research gap, which this study seeks to address. It is against this background that the aim of the study is to develop a support framework for informal entrepreneurship in KwaZulu-Natal focusing on uMhlathuze Local Municipality. To achieve this purpose, a sequential explanatory mixed methods approach was adopted. The study administered 256 questionnaires to informal entrepreneurs at uMhlathuze local municipality and 4 officials from financial development institutions (FDIs) were sampled and interviewed using in-depth format. The findings indicate that most informal enterprises in uMhlathuze local municipality are owned by black females who are motivated by the high unemployment rate to engage in informal entrepreneurship. The study further discovered that lack of government support is the main challenge facing informal entrepreneurs in uMhlathuze local municipality. The study recommends a support framework for informal entrepreneurship in uMhlathuze local municipality whose goal is to help informal enterprises become sustainable and generate employment opportunities.
Dissertation submitted to the Faculty of Commerce, Administration and Law in accordance with the requirements for the doctorate degree in commerce in the Department of Business Management, at the University of Zululand, 2022.