Title: Local economic development and small business failure: the case of a local municipality in South Africa

Authors: Silas Mukwarami; Josephat Mukwarami; Robertson K. Tengeh

Addresses: Faculty of Management and Law, University of Limpopo, South Africa ' Faculty of Business, Cape Peninsula University of Technology, South Africa ' Department of Entrepreneurship and Business Management, Cape Peninsula University of Technology, South Africa

Abstract: Despite concerted efforts to nurture SMMEs through a number of methods, including LED initiatives, a high failure rate persists in South Africa. As the quest for a sustainable solution continues, this paper investigates the challenges that SMMEs face in the context of the Bushbuckridge Local Municipality (BLM). The quantitative approach was adopted for data collection. Through the use of a survey questionnaire, data were collected from a sample of fifty owners/managers who were reached through the stratified sampling technique. The study singled out lack of financial assistance, managerial skills, inaccessible global markets as the most dominant challenges to the development of SMMEs apart a from high crime rate and the fear of xenophobia. Lack of technology and insufficient government support received far lesser approval from participants as these were perceived to have less impact on SMMEs growth. This paper draws attention to the ineffectiveness of LED programmes at the grassroots level with specific reference to rural municipalities.

Keywords: local economic development; LED; small business development; SMMEs.

DOI: 10.1504/IJBG.2020.109114

International Journal of Business and Globalisation, 2020 Vol.25 No.4, pp.489 - 502

Received: 25 Jan 2018
Accepted: 19 Sep 2018

Published online: 21 Aug 2020 *

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