The role of informal sector towards entrepreneurship development in Makhado Local Municipality

Abstract

The informal sector plays a pivotal role in developing countries. Its presence in the economy contributes greatly in two ways: firstly, informal entrepreneurs drive job formation through small-business creation. Secondly, it is considered an incubator for business potential and a stepping stone for accessibility and graduation to the formal economy, thus it is a response to poverty and unemployment. The purpose of this study was to investigate the contributions of the informal sector to entrepreneurship development in Makhado Local Municipality. To address the research problem, the Interpretivist paradigm was used. The Interpretivist paradigm is a trend of research approach, and it support the use of qualitative methods for data collection and involves the social interaction with the population group of the study. The Interpretivist paradigm was chosen because it establishes a platform towards understanding the world as it is from subjective experiences of individuals. The study utilized a mixed method approach which includes both qualitative and quantitative approach. The non-probability convenience sampling approach was adopted because it is very easy to carry out with few rules governing how the sample should be collected. A sample size of 150 participants derived using convenience sampling was used to determine various characteristics of the study population. Semi-structured questionnaires were distributed to micro-entrepreneurs. Data collected was analysed using International Business Machines Statistical Package for Social Scientists version (IBM SPSS) 25 and thematic content analysis. The findings and recommendations will be established to ensure a progressive entrepreneurial environment.