Making gender count in procurement policy

Women-led businesses face significant barriers in procurement, receiving only 1.2% of opportunities in India. Structural inequalities hinder their growth.

Women-led development is now a focus area in most gender-inclusive social and welfare schemes. For this. one of the crucial sectors that need promotion is women-oriented businesses (WOBs). Procurement is key to the success of WOBs, yet internationally, women’s businesses receive 1% of procurement spending, as per WECONNECT International.

Akola, Feb 14 (ANI): Women process cotton on traditional machines, in Akola on Friday. The city is also known as the 'Cotton City of India'. (ANI Photo) (Neeraj Bhange)

In India, WOBs make up about 15% of enterprises, but their share in procurement opportunities hovers at about 1.2%. Structural inequalities ensure that women’s businesses, especially those from the lower-income segments, are unable to access opportunities in public and private procurement or, at best, remain disproportionately represented at the lowest tiers of the supply chain.

A study by ACCESS Development Services — Gender Responsive Public Procurement: Need for Accelerated Policy Action — found that despite policies aimed at providing assured markets, women-owned enterprises (WOEs) face substantial barriers to accessing opportunities. These challenges can arise not only from within the enterprises themselves (supply-side) but also from the procurement system and the broader business context (demand-side). In India, 12.2 million women entrepreneurs own 20% of the country’s non-farm enterprises; however, 90% of these are informal, struggling to scale up, indeed survive, due to gender-based biases in accessing finance, business skills and training, and markets. This means women entrepreneurs often encounter greater difficulties in securing financing than their male counterparts. This disparity arises from issues such as insufficient collateral, limited credit history, and discriminatory lending practices, increasing the perceived risk in lending to this segment and, in turn, increasing the cost of borrowing for WOEs. The 2019 Global Entrepreneurship Monitor reports that women are 20% less likely to secure bank loans than men. This financial constraint limits their capacity to invest in necessary infrastructure, technology, and resources required for fulfilling public procurement contracts. This includes limited knowledge of procurement regulations, bid preparation, and compliance requirements. Limited access to modern technology and inadequate business infrastructure hinder the participation of WOEs in e-procurement platforms.

The Public Procurement Bill, yet to be enacted, lacks robust clauses that enforce gender inclusivity, thereby perpetuating the status quo. Traditional procurement practices often favour larger, established enterprises over smaller WOEs. For example, practices that demand significant financial records and substantial performance bonds create hurdles for WOEs.

The absence of strong advocacy for gender-responsive procurement further entrenches the systemic barriers faced by WOEs. Without comprehensive data, it is challenging to measure progress or identify gaps in the inclusion of WOEs. A report by the Indian Institute of Public Administration (IIPA) highlighted that most municipal bodies do not collect or publish disaggregated data on the gender of business owners participating in procurement processes. This lack of transparency hampers efforts to assess the effectiveness of gender-responsive procurement initiatives. Vipin Sharma, CEO of the ACCESS Development Services says, “Although India mandates 3% procurement from women-led businesses, the government continues to procure far less. In order for women enterprises to benefit, it’s critical to explore how the policy can be better operationalised.”

Many steps can be taken to create a more level playing field for women. Government ministries and departments could be incentivised to buy from women. There could be faster approval processes for gender-inclusive procurement, and joint bidding could be enabled on portals. Small-scale women entrepreneurs should be enabled to partner with city or state chambers of commerce to give them a wider platform for procurement. These are just a few measures that can help women enter the marketplace with greater ease and confidence. Much more can and needs to be done to make women count in procurement.

The views expressed are personal