How corruption affects women-led businesses in India
Small and Medium Enterprises (SMEs) form the backbone of the economy in most developing countries. In Asian countries, when it comes to corruption, SMEs are among the most vulnerable. They often have little or no knowledge about the legal framework, low awareness of effective risk management, and a lack of resources to deal with corruption challenges.
Research has shown that women-led companies are particularly exposed to corruption. Women entrepreneurs often face corruption in various stages of their entrepreneurial journey; when accessing public services such as business registration, licensing, land titles registration, administration and others. Women entrepreneurs wanting to bid for government contracts through public tenders face obstacles like networking with the officials (which is easily done by male counterparts), being looked down as incompetent by the officials. Even the corrupt officials or brokers do not feel comfortable to approach them, which in itself is illegal, but since it happens, women entrepreneurs do not even get the opportunity while someone with such ability gets away with it. This adds costs and risks, weakens the viability of their business, and may, in certain circumstances, put entrepreneurs and their staff in personal danger.
Keeping this context in mind, GIZ India’s Project - Alliance for Integrity piloted an initiative “Integri-tea” for women entrepreneurs in India, in partnership with the Her&Now project. The objective of this initiative was to provide a neutral and safe platform for women entrepreneurs to discuss the challenges faced by them in relation to compliance and corruption and find practical solutions to the issues. We started off with introductory sessions to discuss the theme and hear out the entrepreneurs. These five sessions conducted in the states of Rajasthan, Assam, Meghalaya, Manipur and Nagaland, where we saw participation of around 100 entrepreneurs from the region who gave us an insight into the struggles that the cultural gender stereotypes create.
Insights from the initiative
It was interesting to observe how the culturally imbibed and indoctrinated discrimination makes it difficult to even establish this relation. One of the participants shared their experience, where she needed some advice from a chartered accountant. When the women approached him with her query, he quoted a very high fees, so the next day her husband went and asked for a quote for the same issue, where the CA quoted a considerably lower fee. We realized that this discrimination in fee structure could have very well been a result of a common stereotype that women do not understand finance.
Similarly, women faced a lot of challenge in creating business network or connections with the officials which comes easy to male counterparts, making it easier for men in business to deal with public authorities and/or expand their business. Women with considerable responsibilities of household and the stigma associated with after-work parties or late-night gatherings over drinks tend to avoid such networking strategies.
Through our interactions, we also realized that since most of the women started small, their initial business partner/relations or transactions were within a close group of family/friends or acquaintances, whom they could trust and hence would not get into a written contract. This eventually made it really difficult for them to ask for their payments. Not only that, it becomes challenging for them to be assertive to get their own claims as they fear retaliation which may take form of violence.
While we did not hear about issues of sexual harassment in the small sample size in India, in our global experience, we also found out that there are incidents where the currency of corruption is in the form of sexual favours.
Based on these conversations, we organized a couple of capacity-building sessions for women entrepreneurs on Intellectual Property Rights compliances and Contract Management with experts from the Industry. We conducted our flagship “Vyapaar se Vyapaar ko” Business Integrity Training, specifically customized to the challenges and needs of the women entrepreneurs.
With increasing number of such sessions, we observe that women entrepreneurs feel more comfortable discussing their challenges and we strive to listen and understand their issues and try to figure out practical solutions. We have established a Global Sounding Board for Gender and Corruption to have a focused approach.
We have only embarked on this journey and there is a long way to go. But we realize it as a concern, a concern that needs to be acknowledged and worked on to create a level-playing field, where women are not a step behind from the start. Through this platform of Integri-tea, we look forward to bringing more information on compliances and capacity building and promote peer-to-peer exchanges with the entrepreneurs globally.
Seema is the Network Manager India for Alliance for Integrity, GIZ and has been with the project for almost 3 years. She is a lawyer by education and has pursued her LLM in International Law and Sustainable Development from University of Strathclyde, Glasgow. She is the recipient of the prestigious Commonwealth Scholarship. She has 8 years of experience working on issues related to transparency, right to information and corruption in both public and private sector. She has previously worked with organisations like United Nations Global Compact Network India, Commonwealth Human Rights Initiative, Legasis Services Pvt. Ltd. etc. Ms. Seema has been actively involved in a number of publications on right to information and compliance.
 Data also shows that female-owned businesses earn twenty-three percent (23%) less in profits than their male counterparts because bribes and informal payments affect female entrepreneurs more than they do male entrepreneurs (World Bank Group. (2019). “Profiting from Parity: Unlocking the Potential of Women's Business in Africa.” World Bank, Washington, DC).
 UNDP. 2019. Seeing beyond the State: Grassroots women’s perspectives on corruption and anti-corruption [online]. Available: https://www.undp.org/content/dam/undp/library/Democratic%20Governance/Anti-corruption/Grassroots%20women%20and%20anti-corruption.pdf, p. 2
 How to empower women-led businesses and make procurement more inclusive, Insights Report, Open Contracting Partnership, 2020