Sourcing2Equal Kenya: Barriers and Approaches to Increase Access to Markets for Women- Owned Businesses

IFC undertook this study to understand the barriers that 571 Kenyan SMEs face in accessing private procurement contracts, and if there are differences based on whether companies are owned by women or men. We also sought to highlight emerging practices for Buyers to increase the procurement of goods and services from women-owned small and medium enterprises (WSMEs). The findings of this study inform the design and implementation of IFC’s Sourcing2Equal Kenya Program, launched in 2021, to support WSMEs in Kenya to become procurement ready and able to access contract opportunities. We encourage companies that procure goods and services in Kenya to use this report to inform and scale up their own efforts to diversify their supplier base so that it is more inclusive of women-owned businesses.

Key Findings:
 

• Women have less access to contract opportunities with corporate buyers. Buyers estimate roughly 3 percent of procurement purchases go to women-owned SMEs. In the research sample, women are more represented as sub-contractors supporting other business fulfill their orders—instead of directly supplying to buyers.
  
  
• Women face three key barriers to access contracts:
  1. limited access to capital,
  2. lack of access to resources to enhance operational capacity, and
  3. limited access to networks and information on tenders.
     
     
• Corporate buyers face challenges to increase their procurement purchases with women-owned SMEs:
  1. limited information on best practices to prevent gender disparity in sourcing,
  2. a lack of understanding of financial and non-financial needs of women-owned SMEs compared to SMEs owned by men to inform the business case for targeted efforts,
  3. inability to find eligible women-owned SMEs to place orders directly with them,
  4. existing procurement policies and procedures create unintentional constraints for new women-owned SMEs to compete on equal footing with large or existing suppliers, and
  5. a lack of standard pre-qualification processes that are publicly available, which inhibits buyers from inviting potentially eligible WSMEs to participate in tenders.
     

• Areas where Buyers can focus their support for Kenyan WSMEs include:
  • Partnering with local financial institutions to facilitate access to working capital
  • Adapting contract payment terms so help women-owned SMEs maintain their cash flow
  • Implementing supplier development solutions by partnering with local SME support organizations and tailor solutions the varying need of suppliers – both direct and subcontractors
  • Increased outreach to women-owned SMEs and use existing digital platforms to post tender opportunities
    
    
• Within their own firms, Buyers can:
  • Set guidelines and internal policies to source from women-owned SMEs
  • Build a pipeline of eligible women-owned SMEs
  • Set targets to increase volume of purchasing from women-owned SMEs
  • Track women in the supply chain—both direct and subcontractors