Women businesses need process reform

A vendor arranges tomatoes on a shelf at her kiosk in Mucatha, Kiambu County, on August 14, 2017. Cash flow challenges is the major reason many companies fold before they are three years old. PHOTO | MARTIN MUKANGU | NATION MEDIA GROUP

What you need to know:

  • One of the biggest and unspoken challenges is the unconscious bias that makes people think that women cannot lead big money projects.
  • Access to capital remains a challenge, with many financial institutions demanding collateral for instruments such as performance bonds.

The National Treasury recently reported that woman-owned businesses received Sh27 billion of the Sh50 billion tenders set aside by government agencies over the past four years.

The 23,165 tenders were the result of Access to Government Procurement Opportunities (AGPO), whose national budget is Sh7.8 trillion.

But while Sh27 billion may be seen as better than nothing, questions linger whether the low uptake is a result of lack of drive, resilience and temerity on the part of the women or challenges within government.

PAYMENT
Payment terms have been discussed over and over again; you cannot hold suppliers’ money for more than 30 days and expect performance.

Cash flow challenges is the major reason many companies fold before they are three years old.

Supplying county and national governments is easy; chasing the payment is the harder part.

If this is reformed, more women will find it easier to do business with them.

CAPITAL
AGPO may be a noble initiative but, besides setting aside 30 percent of the tenders for women, you have to reform the other processes as demands on finance, experience and performance bond remain the same.

One may argue that some technical projects require experience and extensive capital and others do not, but the demand is there anyway.

How can the process be made easier for women at the entry level?

How will women get the experience if no one is willing to take a chance?

Access to capital remains a challenge, with many financial institutions demanding collateral for instruments such as performance bonds.

Some banks do not accept as security land that is not developed or is in certain areas.

REFORMS
Capital affects all businesses but, if women are to take up their portion, there needs to be an honest conversation on the processes that ought to be reformed to spur the take-up.

For instance, the National Construction Authority has been challenged to facilitate a fund for local contractors eyeing major projects who lack working capital and a performance bond.

That will allow them to compete on a more level playing ground with international rivals, who win the lucrative contracts because their governments back them.

Women have also shied away from government contracts due to past experience or perception that State agencies do not pay.

Others wait for ready-made opportunities; we do not chase or develop relationships with procurement teams.

NETWORKING
Discussing business development and relationship building is usually mistaken for canvassing.

But the alternative is to sit back and watch as the others take up the tenders!

Development of company profile, business plan, having a qualified workforce, delivery plans and follow-up with the client remain the responsibility of the entrepreneur.

Even if you are at the centre of AGPO and cannot deliver proper paperwork, you will most likely not clinch the tender.

SDG
AGPO does not guarantee success; that is a personal decision and effort.

But the drive has allowed the private sector to adopt the initiative and make efforts to increase the women’s businesses in their prequalified firms list.

Private sector initiatives have also been bolstered by the push by the United Nations for more companies to commit to the Sustainable Development Goals (SDGs).

Gender Equality is goal number five and Reduced Inequalities number 10.

One of the biggest and unspoken challenges is the unconscious bias that makes people think that women cannot lead big money projects.

However, there will always be those held-back by beliefs and those seeking alternative ways of doing business.

Ms Wanjiku is the CEO, Fireside Group, an engineering solutions provider. [email protected].