SMMEs promoting Local Economic Development (LED) in UMlalazi Local Municipality, KwaZulu-Natal.

Abstract

The purpose of this paper is to assess the role of Small Medium and Micro Enterprises (SMMEs) such as tourism and hospitality enterprises for example, towards promoting Local Economic Development (LED) in rural areas within UMlalazi Local municipality (ULM), Kwa-Zulu Natal, South Africa. South Africa is facing the challenge of a high rate of unemployment which leads to poverty amongst many households, particularly in rural areas. In response to unemployment and poverty reduction, people in rural areas established SMMEs to earn a living. SMMEs are regarded as a major source of income generation and strategy for poverty alleviation in most rural areas. The objective of the study was to assess whether SMMEs contribute towards enhancing LED including reducing unemployment rates and contributing towards economic growth in ULM. This study was exploratory using a quantitative research method to collect and analyse data. It administered 100 questionnaires to SMMEs owners and workers in the area in question. The study found that SMMEs within the case study play a dominant role in reducing the unemployment rate and alleviating rural poverty. It also revealed that challenges are faced by SMMEs which sometimes lead to the shutting down of businesses because these challenges hinder their social and economic growth. The study recognise that SMMEs in rural areas have contributed towards LED, but the lack of information on how they can get support from stakeholders and government institutions in order to grow and develop both social and economically remain a problem. The study recommended that ULM should consider using Public-private partnership (PPP) so that they can be aided to give more needed support to SMMEs.

Keywords

• development
• rural communities
• South Africa
• SMMEs