The contribution of Small, Medium and Micro Enterprises towards Local Economic Development in Mankweng Township, Limpopo Province

Abstract

The main focus of this study was to investigate the contribution made by SMMEs towards local economic development (LED) in Mankweng Township. To this end, specific working objectives were formulated as follows: to study the nature of SMMEs, to identify the challenges they face, to analyse the theory of local economic development and lastly, to study the role of SMMEs in local economic development. A variety of data collection methods were used in this study such as literature review, semi-structured questionnaires and observations. The study revealed that SMMEs represent a vital component of the local economic development process in Mankweng Township, and their contributions in terms of employment, income and poverty reduction is well acknowledged. However, SMMEs are constrained by a number of challenges such as lack of access to appropriate technology, limited access to markets, government regulations, lack of management skills and training, all of which hamper their development. Lack of access to finance remains the utmost constraint for most of SMMEs. In an attempt to enable the SMMEs sector to perform effectively and efficiently, a number of support initiatives were introduced by the South African government. This ranged from government institutions, private sectors, parastatals and NGOs. Conversely, access to these support initiatives remains a challenge for most entrepreneurs, as most of the SMMEs in Mankweng Township operate within the informal sector and they lack awareness of the support initiatives and structures provided by these institutions.