In South Africa, Local Economic Development (LED) has not fully produced the desired results because of the inability of local municipalities to drive LED, even with the establishment of economic development agencies, especially in small rural towns. The development of small rural towns through the informal economy is also key to the implementation of the goals of South Africa's developmental local government agenda. This proposition was tested using the case of Mtubatuba, a small rural town on the northern coast of KwaZulu-Natal. It explores the contribution of informal trading to the livelihoods of traders, and explores the impact of informal trade on employment of traders operating in the informal economy of Mtubatuba Municipality on KZN's North Coast. Using a mixed-methods design, simple random and purposive sampling was used; data was collected using survey questionnaires from informal traders in the area. Interviews wer