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WEDF 2014 session report - Plenary session 5: Why buy from women-owned enterprises

  • WEDF 2014 Plenary 5

    Speakers

    • Hon. Oda Gasinzigwa, Minister of Gender and Family Promotion, Rwanda
    • Ms. Yeşim Seviğ, Secretary General, Kagider, Turkey
    • Ms. Maggie Kigozi, Director, Pepsi Cola Franchise Board, Uganda
    • Ms. Archana Bhatnagar, Director, Haylide Chemicals and President, Madhya Association of Women Entrepreneurs, India
    • Moderator: Ms. Julie Gichuru, News Anchor, Citizen TV, Kenya

    Overview

    At least a third of small and medium-sized enterprises (SMEs) in developing countries are owned by women – yet only a very select few win important procurement contracts.

    In most countries government procurement accounts for 15-20% of GDP. Worldwide, companies spend trillions of dollars annually on goods and services. Targeted procurement that ensures women and other disadvantaged groups receive a fair share of available contracts holds enormous development potential.

    Corporate and government buyers discussed sourcing and the advantages of buying from women-owned businesses. ITC launched its sourcing initiative with a new guide on public procurement for women-owned enterprises.

    Conclusions

    • Expanding the supply pool increases competition and makes good business sense.
    • For governments, procuring from women is a fiscally responsible investment and a tool at their immediate disposal.
    • For business, investing in women is also an investment in the decision maker in household-level spending.
    • Institutions and associations can do more to prepare women business owners to become preferred suppliers and meet buyers' requirements.

    Takeaways

    • Women need to produce high quality products and services – otherwise they will not find buyers regardless of any preferential measures that may be put in place. However, even with high quality products, uptake is still low. Governments should start to tackle this problem via the public procurement process. More commitment and policies are needed from the public sector.
    • Access to finance limitations are preventing more women-owned business from succeeding. There needs to be a change in mentality to deliver the message that women-owned businesses help social and economic development. More capacity building is needed in areas like credit skills and marketing. Evidence from several countries indicates that quality and pricing are often better from women-owned businesses.

    Speakers' key messages

    • Minister Gasinzigwa  
      The legal and policy framework should be changed, an enabling environment is required. Rwanda has been working on this. Women are active in the health, nutrition and family. Rwanda is working on initiatives such as a women chamber of entrepreneurs. In Rwanda over 46% of SMEs are owned by women but, capacity is still often lacking.
      “Women and economic development are twins. They go hand in hand.”
    • Ms. Sevig 
      In Turkey, much is being done to build the capacity of women-owned businesses and to improve the business environment. The issue is of major economic importance; new jobs can be created via women-owned businesses. The private sector knows that they need to engage more with women. At present, 7% of total entrepreneurs are women.
    • Ms. Kigozi 
      Women play a major role in purchasing decisions. Pepsi looks closely at buying from women. It does not have any quotas, but the company realizes that it makes business sense to buy from women as they ensure that families and communities are stronger. Women need to have more confidence when approaching markets. They need to develop associations that can speak for women – women’s capacity needs to be improved in this area. Women entrepreneurs need to know the right standards to choose when sourcing products. Less than 1% of public procurement value comes from women worldwide – the question is what the best strategy is to significantly improve this ratio within a short amount of time. As the first step, public procurement rules need to be simplified.
      “We are here and we are here to stay. There are opportunities in all sectors.”
    • Ms. Bhatnagar
      In India, there is a ministry dedicated to MSMEs: the goal it set is to increase the share of MSMEs in public procurement to 20% - this is expected to help women business owners. One issue is that entrepreneurs do not know about schemes available for women-owned businesses, which need to be advertised more widely. Data is hard to come by on women-owned businesses in India. ITC’s Women and Trade programme identifies women-owned businesses and links them to buyers.
      “Why buy from women? I say why not? 1.8 dollars of every 2 dollars in income goes back to the family. Buy from women-owned businesses because the quality is good, and the products and services are innovative, with high transparency and honesty in the transaction. The commitment to service is high as well, and costs are competitive.”

    Discussion

    During the discussion, participants commented on the positive ripple effects that buying from women has on the economy when 90% of profits go back to families. Capacity building is also important, along with diversifying the sectors where women are active in business.

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