Women SMEs seeking access to government tenders in Indonesia
January 4, 2023
No other sector wields such sway and influence over the Indonesian economy more than the small, middle, and enterprise (SMEs) sector.
The SMEs sector accounts for 99.9 percent of all Indonesian businesses. In addition, the industry contributes 60 percent of the country's GDP. There are presently 65 million SMEs, accounting for 97 percent of Indonesia’s entire workforce.
And yet, only a fraction of these SMEs —0.26 percent — have obtained a government contract. The figure is estimated to be much lower for the women-led SMEs as they generally have more restricted access to financial resources. This challenge was recently discussed by the National Public Procurement Agency (LKPP) during a Dialogue on Public Procurement for SMEs.
UNDP’s FairBiz Project collaborated with Alliance for Integrity and National Public Procurement Agency (LKPP) to organize the She-Bid Training last December which aims to equip women-led SMEs to access public procurement tenders, increase their competitiveness and market shares. The training also provides participants with knowledge on governance norms and corporate integrity to prevent corruption in government services.
To widen access of the SMEs to government contract, the government has recently passed a law requiring the public sector to allocate 40 percent of its procurement budget to SMEs’ products and service. This strategy is expected to support SMEs’ access to public procurement with government, especially for those who were severely impacted by COVID-19.
Women-led companies are especially more prone to corruption in accessing business support services. Women entrepreneurs often face corruption in when accessing public services such as business registration, licensing, land titles registration administration and others. Furthermore, they often encounter challenges when they bid for government contracts through public tender. This adds costs and risks, weakens the viability of their business, and in certain circumstances, put entrepreneurs and their staff in personal danger.
The procurement workshop was a follow up from the first virtual She-Bid training in September 2021, which involved 25 women-led entrepreneurs. The FairBIz project subsequently collaborated again with its key partners and with Indonesia Global Compact Network (IGCN) to scale up the number to 70 participants from various different industries.
The two-day training covered topics such as implementing business ethics, transparency and accountability within business operations, and participating in public procurement. Participants returned two months later for an Open Day to discuss how they had put their learning and training into action and received expert advice from the FairBiz team. The Action Day provided a platform to reconnect through sharing sessions on successes and challenges and transforming into a strong network.
Laura Wijaya, Economic Advisor at the UK Embassy noted that “based on the research, 76 percent of women-owned SMEs were affected by the Covid-19 pandemic. Hopefully this training can make a positive contribution to their business, and we at the UK Government are extremely proud to support the FairBiz project, as well as enabling the development of such this multi-stakeholder partnership.”
Siprianus Bate Soro, Team Leader of UNDP’s Democratic Governance and Poverty Reduction Unit, called on the importance of collaboration.
“We built one collaborative action with related key partners to support government programs, in order to reach great impact in socio-economic development,” he said.
He further encouraged participants to never give up in participating the tender and to learn more on the procurement process via the Massive Open Online Course platform provided by UNDP on LKPP’s platform.
A few participants were successful in gaining government contracts such as Ms. Zunna Haefi, Director of CV. Media Sarana CB who won a contract to supply communication equipment with the Regional House of Representatives in Batang, Central Java Province. Others were also successful in establishing a code of ethics in their businesses.
Text by Damianus Moa
Edited by Tomi Soetjipto and Ranjit Jose