Make procurement work for women entrepreneurs
World Bank’s private equity fund, the International Finance Corporation (IFC) estimates that 98 per cent of Kenyan businesses are small to medium-size enterprises (SMEs). Further, a third of the SMEs are owned by women, translating to a 20 per cent contribution to the GDP. Globally, only one per cent of procurement spend by large corporations goes to women-owned SMEs.
By 2013, a paltry seven per cent of State contracts had been awarded to women despite the government compelling institutions to offer at least 30 per cent of the contracts to women, youth and people with disability. This points to a huge gap between the number of women-owned and male-owned businesses awarded high-valued tenders in government and private institutions.
The inequality in the supply chain has inhibited women’s potential in business. Inflation pressure and the impact of Covid pandemic could dampen their survival and lead to an economic crisis. This calls for support to women to help them contribute towards full economic recovery.
Since women-entrepreneurs, specifically in developing nations, are often small, they don’t have the economic muscle to adapt to changing market conditions and requirements.
Limited access to information on what and how corporate buyers purchase, corporate procurement requirements, how to position businesses to meet the requirements and limited access to affordable and effective use of finance to bid on larger procurement contracts are among the barriers that limit women-entrepreneurs’ access to procurement opportunities.
Most women are credit-constrained because they have less physical and reputational collateral such as land, that can be used to secure credits from lenders. They mostly depend on family contribution and savings, which sometimes is not enough to bid for the tenders. In addition, women have constraining roles they can’t abandon, and which restrain women from networking with other business leaders hence missing critical lessons and possible business opportunities. Also, the rampant cases of gender violence and sexual harassment continue to weigh down women-led businesses.
Solving the current gender inequality in procurement requires a collective effort from government and private sector. Governments can leverage their roles as both buyers and advocates in increasing women’s participation in public procurement.
This can be achieved through increasing the proportion of women in sourcing for suppliers and creating capacity building opportunities targeting women-entrepreneurs. Equally important, they can lead from the front as “market regulators” through implementing the existing procurement policies while showing why investing in women-owned businesses through procurement makes good business sense.
Corporates also have a role to play by practising ‘gender-inclusive sourcing’ which involves addressing gender gaps in procurement.
An all-gender supply chain is a collective responsibility of credit lenders, companies and women business leaders. Credit lenders should identify loan requirements that discriminate against women and remove the hurdle. Private and government institutions should intentionally implement plans to empower women.
Gender inequality is even predominant in the construction sector and much needs to be done to catch up with other sectors. It is for this reason that Bamburi Cement prioritises gender equality in operations. It recently joined ‘Sourcing2Equal’, a programme aimed at building the capacity of women-owned businesses to win procurement contracts with big companies. Through the partnership, women business leaders are trained on how to identify and apply for opportunities that exist.
Even with the existing inequality in procurement, women have gone against all odds and contributed significantly to the economy, creating many jobs. The success stories of some women-owned businesses is evidence that if supported women can transform the economy.
They are known to be decisive and the economy can perform better if they are offered a levelled playing ground in public and private procurement. All opportunity seekers deserve an equal chance of winning.
— The writer is the Supply Chain Director at Bamburi Cement PLC