“Collectively women control $36 trillion in GDP. That’s why women cannot be ignored.”
That is how Bonney Tunya, CNBC Africa Anchor and moderator kicked off the “Financing Women-Owned SMEs in the Global Supply Chain” plenary session at Women’s World Banking’s Making Finance Work for Women Summit.
The panel featured Omokehinde Adebanjo, Africa Business Head at MasterCard, Patience Nambo, Gender Specialist at World Cocoa Foundation, and Douglas Brew, Corporate Affairs and Sustainable Business Director at Unilever. The panelists shared challenges, the value proposition, and what private and public sector organizations can do to empower women in the global supply chain.
Discovering a new market through data
Doug Brew from Unilever said it starts with data. “Being aware of what you’re doing as a company is absolutely critical.”
Five years ago, Unilever set very ambitious targets related to improving the lives of women in their supply chain. Doug admitted that at the time, the company had little idea of the role women actually played, and their targets were way off. Today, thanks to data, Unilever has much better insight.
Doug sees the challenge is found at the end of the distribution chain, what he refers to as the “white space.” This is where the traders who are buying and selling Unilever’s products are predominantly women, and where access to finance and credit is a big constraint.
However, as he pointed out, the market potential is huge.
“Once you know how many women you have in your supply chain; you realize the biases that run through every organization and you start to realize you have a huge underplayed asset.” Doug went on. “Your ability to reach out and bring those women to a business proposition is absolutely enormous.”
Recognizing the opportunity, Unilever and many companies like them have taken women’s empowerment “out of CSR.” It’s no longer something done through a foundation or on the side, but rather as a core market of business.
Brand equity through alternative sourcing
Patience Nambo of World Cocoa Foundation believes that a key limitation to empowering women in the supply chain is the lack of farm financing solutions for smallholders.
“In Africa, the level of contribution to the economy by smallholders is 55%. Yet only 1% of banking services are directed toward agriculture products, farmers, or agricultural businesses. Smallholder are competing with much larger businesses for that 1%,” said Patience. “This poses an enormous challenge, especially for women.”
But as Patience shared, there is a compelling business case for serving women famers in the global supply chain. Consumers today are reading labels and are interested in “the story” of how their chocolate is sourced. For companies, there is tremendous value in being able to source ingredients from local and diverse suppliers, and they can guarantee that supply by sourcing from women.
Standard operating procedures: a barrier to women’s inclusion
According to Omokehinde Adebanjo of MasterCard, in addition to the known identification and legal land ownership barriers that prevent women from having collateral, education is a major barrier for women in the global supply chain. She pointed out the complexity in procurement tools and contracting vehicles that are difficult for entrepreneurs with low level of literacy to navigate.
So, what can be done? The panel discussed financial and non-financial services that enable women to be part of the global supply chain.
Solutions for an inclusive supply chain
Omokehinde said it is about developing products that make sense for women, taking into consideration those laws and restrictions women face “just by being women.” For example, a grant from MasterCard helped a women-focused microfinance institution in Nigeria develop an alternative credit scoring product that allows them to score women more easily.
She also stressed the need to teach girls at a young age basic entrepreneurial skills and how to use finance, something MasterCard is doing. “This way, young women will know they have place in society that is more than being a mother, they can be a contributor to the economy as well.,” adding “It sounds simple, but it’s so impactful. You can trace the women and see them make more money for themselves and their families just by getting basic tools.”
Patience added impact financing as another way to deliver solutions to women who are otherwise excluded from traditional financing. “When women entrepreneurs approach a bank, they are asked two questions: ‘What do your financial records look like,’ and ‘do you have a buyer?’” said Patience. “As a startup or an SME, you need to be able to meet those specifications.”
She stressed that doing business in traditional ways excludes many women-owned business. If companies want to secure a local supply business, they need to do things differently, like being willing to set aside the fact that women don’t have capital or collateral. Patience believes that if they can see a history of competence, companies should trust the women in the supply chain and know that if they give her the resources, she will deliver.
Doug Brew said that beyond financing, one thing large organizations can do is facilitate the partnerships that are needed to reach women in the supply chain. “You cannot turn to a global partner and expect them to operate in northern Nigeria, you need a local partner.” Pulling those people together is a vital role for companies like Unilever.
He reiterated that companies must also apply a gender lens to their policies, otherwise there will always be a natural bias toward established suppliers. He pointed to Unilever’s strategy paper “Opportunities for Women: challenging harmful social norms and gender stereotypes” to understand how they do it.
Doug also addressed something much harder to tackle: influencing structural changes in broader financial systems. “Let’s go for that space where the regulation is not set, where it’s flexible or emerging, and let’s make sure that before its set in stone its going in the right direction,” he urged.
All the panelists agreed there is a role in partnerships with companies and governments, and for companies like MasterCard and Unilever to use their global scale to affect change in targeted ways.
“Challenges women face are cultural, political, sometimes religious, things they have no control over. It’s our job to make sure those barriers are removed. If we have two billion un or underbanked, and we know that a disproportionate amount is female, you need to take bold steps,” Omokehinde said, adding “Level the playing field and watch us compete.”
To watch the full panel on “Financing Women-Owned Businesses in the Global Supply Chain” check out the video here.