Make procurement work for women entrepreneurs
By Moses Were
In Kenya, 98% of all businesses are small to medium-size enterprises (SMEs). Women-owned SMEs account for 33% of this critical sector which translates to a 20% contribution to the country’s GDP – according to World Bank's private equity fund, the International Finance Cooperation IFC. The picture is even worse in the global arena since only 1% of procurement spend by large corporates goes to women- owned SMEs.
By 2013, only 7% of the recorded contracts have been awarded to women despite the government compelling institutions to offer 30% of the contracts to women, the youth, and people living with disability through the ‘Access to Government Procurement Opportunities’ program. Evidently, not much has changed since then, pointing to a huge gap between the number of women-owned and male-owned businesses awarded high-valued procurement tenders in both government and private institutions.
The inequality in the supply chain has inhibited the potential women have in business. The ongoing inflation pressure due to the rise in fuel prices and the recurring losses due to the negative impacts of the pandemic could dampen their survival and lead to an economic crisis in the country. This calls for support to ensure their impact is felt towards the full recovery of the economy.
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 their 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 roles that they can’t abandon, like taking care of the family. In an estimate, women spend twice as much time as men on home unpaid tasks. Due to the numerous tasks, women lack time to network 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, especially in rural parts of the country.
Solving the current gender inequality in procurement requires a collective effort from both the government and the 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 direct and indirect 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.
Corporate companies also have a role to play through practising ‘gender-inclusive sourcing’ which involves proactively addressing gender gaps in the procurement operations of corporate supply chains. Most companies are not keen on a gender-inclusive supply chain. For instance, they don’t monitor gender-disaggregated procurement data to know how many of their suppliers are women-led businesses. This makes it hard to spot gender gaps and barriers to women's participation in procurement because there are no deliberate actions towards gender inclusivity in procurement.
An all-gender supply chain is a collective responsibility of credit lenders, private companies, and women business leaders. Credit lenders should identify loan requirements that discriminate against women and remove the hurdle. Private and government institutions, other than strictly adhering to the gender-inclusive laws in procurement, as spelt out in the constitution, should intentionally implement plans to empower women.
The issue of 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 we as Bamburi Cement prioritize gender equality in our operations. We recently joined 'Sourcing2Equal', a program aimed at building the capacity of Women-Owned Businesses to be able to win procurement contracts with big companies. Through the partnership, we will train women business leaders on how to identify and apply for opportunities in our company. We will also create awareness of opportunities that exist through our various online platforms; among others.
Even with the existing inequality in procurement, women have gone against all odds and contributed significantly to the economy, creating thousands of jobs. The success stories of some women-owned businesses demonstrate women's traits that when supported can transform the country's economy. Women are known to be decisive and they reinvest a large number of their income to ensure the future of their families is secured. The economy can perform better if women are offered a leveled playing ground in public and private procurement. Research done in 2015, by McKinsey, estimates that a gender-equal labour market could add as much as $12 trillion, or 26% to the global annual GDP by 2025.
The benefits of having a diverse work environment are well known, and to enjoy them similar initiatives should be implemented in other manufacturing industries. All opportunity seekers deserve an equal chance of winning.
Moses Were is the Supply Chain Director at Bamburi Cement PLC.