Challenges Faced By Informal Sector Entrepreneurs: A Focus On The Street Vendors At The Mbombela Municipality

Abstract

The informal sector is essential to solving the socio-economic problems that many
countries face globally. Entrepreneurship in the informal sector accounts for 10–
20% of GDP in developed countries and as much as 60% in developing countries.
The informal sector in South Africa makes up roughly 5.2% of the nation's GDP
and 15–17% of the total employment. Yet, research regarding the challenges that
informal sector entrepreneurs encounter is still sparse, not much is known
regarding ways in which these challenges can also be addressed. This qualitative
study explored the challenges faced by street vendors at the Mbombela
municipality. Using thematic analysis and purposive sampling, 25 street vendors
were interviewed, revealing the key themes regarding the challenges encountered
by informal sector entrepreneurs. The findings highlighted that the struggles of
street vendors include humiliation, stigmatization, difficulties in obtaining permits
due to complex procedures and educational barriers. The study also noted a lack
of government support for these informal entrepreneurs. Recommendations
include measures to educate street vendors on business management, technology
adoption (e.g., mobile payment systems), and improving the cleanliness and safety
of their operating environment. By addressing these challenges this study aims to
contribute to the empowerment and development of informal sector
entrepreneurship.