Assessing the challenges faced by informal entrepreneurship

Informal entrepreneurship is the bedrock of the economy and plays an integral part in lowering unemployment and poverty. Although there are studies, conducted on entrepreneurship in general in South Africa, limited research has been carried out specifically on informal entrepreneurship. Using neo-liberalism theory, the study sought to investigate the challenges, faced by informal entrepreneurship in South Africa. The usable data was collected from 242 informal entrepreneurs operating their businesses in a large municipality in North of KwaZulu-Natal in South Africa. The study adopted quantitative research approach and descriptive research design. The study employed random sampling technique under the ambit of probability sampling method. Data, collected through the close-ended questionnaire, were analysed using the Statistical Programme for the Social Sciences (SPSS) programme version 29.0. The closed-ended questions were designed in the form of a 5-point Likert scale and dichotomous questions where respondents had to choose the answer that best suited their choice. The non-parametric inferential statistics were utilised to identify the challenges, faced by informal entrepreneurship. The major challenges, found by this paper, include insufficient municipal services, lack of appropriate government support, lack of access to funding, and strict government policies and regulations. In relation to daily operational challenges, faced by informal enterprises, the results indicated unfair competition and lack of water and electricity on the site as key challenges, experienced when operating their businesses. Training, coaching, and mentoring should be provided to informal entrepreneurs as significant support mechanisms for informal SMMEs. The municipalities should profile informal enterprises and engage financial institutions, such as banks, to establish a semi-formal credit approach that would permit informal enterprises to borrow small and affordable sums of money for capital injection