Challenges faced by informal sector entrepreneurs: a focus on the street vendors at the Mbombela municipality.

Abstract

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.