Why women fail to win big business contracts

Women fail to clinch contracts because ‘they don’t know people’. [iStockphoto]

Doesn’t it always feel good when you approach someone to help you out on something and they trivialise your issue saying: "This is a small problem?"

And before you pour out more of your heart, they pick up their phone, dial some number, and you hear the person on the other end muttering several "yeses" and "no problems" –whether willingly or begrudgingly – before they disconnect the call and turn to you and ask: "Is that all?"

Everyone wishes to have such kind of a friend. Or to know someone who happens to be well connected. 

Such happens to be the case when it comes to business - especially for small and medium enterprises (SMEs) that are women-owned. 

It just happens that if you are not in the right circle of individuals as an SME, then you will only be hearing of tales on how contract x or y was clinched and you never got wind of it yet your company is well capable of supplying the products or providing the services.

A report titled Sourcing2Equal Kenya: Barriers and Approaches to Increase Access to Markets for Women-Owned Businesses documents these challenges

According to the report, there are more men who get wind of tenders "through word of mouth within my social networks" (67.4 per cent) compared to women (46.7 per cent).

The percentage, when it comes to referrals through supplier partners or corporate buyers is almost equal for both women-owned SMEs and male or jointly owned at 40 per cent and 39.5 per cent respectively.

The percentage is the same as well when it comes to getting tenders from existing business relationships with other SMEs (53.5  per cent versus 52.4 per cent), newspaper adverts and classifieds (55 per cent versus 56.2 per cent) and referred to buyers through supplier relationships (58.1 per cent versus 54.3 per cent).

The number of women who scavenge for tenders on platforms is more at (57.1 per cent) compared to male (or jointly owned) at 52.3 per cent.

“When tier 1 suppliers were asked how they accessed contacts or identified opportunities, Women-led small and medium enterprises (WSMEs)  appeared to have less access to networks that they could connect with "through word of mouth,” says the report. 

The report documents that WSMEs differed in their top three tactics including directly accessing tenders through a tender platform (57.1 per cent), searching classified or newspaper advertisements (56.2 per cent), and leveraging supplier relationships to get referrals.

“Only 46.7 per cent of WSMEs listed accessing contracts through personal networks,” the report reads.

The report compiled in partnership with the International Finance Corporation (IFC) and Women Entrepreneurs Finance Initiative (we-fi) is the background of the Sourcing2Equal program currently running in the country whose purpose is to boost the participation of women-owned businesses in procurement leveraging on the 30 per cent government policy under Access for Government Procurement Opportunities (AGPO).

The policy provides that 30 per cent of government procurements should go to individuals living with disabilities, youth and women.

Kenya Electricity Generating Company (KenGen) which the government has a stake is one of the businesses participating in this program that will run for three years.

Other businesses are Tropikal Brands (Afrika), Stanbic Bank Kenya Ltd, Bamburi Cement Plc, Unilever Kenya Ltd, Naivas Ltd, Line Plast Group, Bidco Africa Ltd and Absa Bank Plc.

The report, expounding on why only 46.7 per cent of WSMEs listed access contracts through personal networks, says more male or joint SMEs are leveraging personal networks than is the case with WSMEs.

“And that information flows are largely informal, and through local social and business networks that WSMEs may not know about, or have access to,” the report explains.

The report says this emphasises the importance of WSMEs expanding their networks so that they can find tender opportunities even as data showed that more WSMEs are accessing online platforms to find tender opportunities.

“Notably, buyer interviews revealed that the majority of Buyers in Kenya do not fully use online platforms yet to advertise tenders, and at times they publicise tenders in the classified sections of newspapers,” the report reads.

And for buyers that do post tenders on digital platforms, the report says WSMEs are leveraging them more than is the case with male or joint SMEs.

“This is also evident from the names of the top buyers that are sourcing from WSMEs through Safaricom, which makes tenders and the qualifications required accessible online,” the report adds.

During an interview of this Source2Equal programme in the country in May this year with Standard Group's Spice FM, IFC Country Manager Amena Arif noted that there is an information gap among women-owned businesses which limits how they access the market.

“Essentially they do not know how to look for and access these procurement contracts,” she said. “They do not have those networks, they do not know how to get to them, and they do not know to capitalise even if they see or hear of an opportunity.”

The programme, she said, aims to empower 1,300 women-owned businesses in the procurement value chain.

“Women do not have a dearth of ambition or desire to grow, “she said. “I think sometimes they lack the means, desire and skillset.”

She added that the same goes for companies (buyers).

“It is not like companies go out there and say ‘we do not want to source from women-owned businesses. Companies are really now committed but how do they go about it? How do they find these businesses?” she posed.

In the IFC report, the buyers interviewed for this study were asked if they would source more from WSMEs if there was a platform that had a strong pool of suppliers who met their criteria.

“Buyers said that they would consider using such a platform, especially if it connects them to eligible WSMEs,” the report reads.

The report notes that these findings have implications for buyers that are seeking to reach potential WSME suppliers, as the use of tools such as digital platforms and classified ads should be considered as part of their supplier development and outreach strategies.

“Additionally, interventions to support WSMEs’ greater access to tenders could include virtual supplier-buyer matchmaking events to improve a buyer’s visibility and nurture relationships with potential businesses,” the report says.

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