From contract to collateral: How state procurement data can unlock bank financing for women vendors
By Precious Ebere-Chinonso Obi
The successful adoption of the Affirmative Procurement Policy in two Nigerian states (Lagos and Kaduna) is a monumental win for gender equity. After years of advocacy through our Women Economic Empowerment through Affirmative Procurement project, we now have policy instruments designed to bring women entrepreneurs into high-value public supply chains.
However, a significant implementation gap remains: converting the contract into cash.
A procurement award is a promise of future payment, but it is not collateral. When a woman-led Small and Medium Enterprise (SME) wins a contract, say, to supply uniforms or catering to a state agency she immediately faces the challenge of securing the working capital needed to fulfill the order. Without a transparent, digitally verifiable financial track record, traditional banks remain reluctant to lend, even with a government contract in hand.
The solution to scaling the policy lies not in creating a new credit facility, but in transforming the procurement process itself into a bankable asset.
The missing link: Trust and data visibility
Banks thrive on certainty. They hesitate to accept a government Local Purchase Order (LPO) as collateral due to the perceived risks of delayed payments, non-performance, or even fraud. A handwritten ledger or a paper invoice does little to assuage these fears.
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This is where the principles of digital resilience, specifically Data-Driven Business Resilience must be embedded into the Affirmative Procurement policy. The state, as the buyer, must become the guarantor of data integrity, bridging the trust deficit between the woman vendor and the financial institution.
Transforming contracts into digital collateral
We must transition the state’s procurement process from a paper-based transaction system to a digital financial record generator.
1. Mandatory e-invoicing and tracking: State procurement portals must mandate the use of secure, standardized e-invoicing platforms for all contracts. Every payment milestone, every delivery note, and every tax remittance associated with that contract must be logged digitally and in real-time. This forces the woman vendor to adopt the data-driven skills necessary for formalization.
2. Verifiable performance history: The state’s system should generate a “Performance Verification Score” for each vendor based on digital data, recording compliance, timely delivery, and quality. This score, unlike traditional collateral, is direct proof of the business’s actual capacity to execute high-value work.
3. Data sharing protocols: The most critical step is the formal policy shift. State governments must execute Memoranda of Understanding (MoUs) with licensed financial institutions (commercial and microfinance banks) that allow them secure, permissioned access to the aggregated, anonymized performance data.
This process transforms the contract from a speculative piece of paper into Digital Collateral, a verifiable, state-backed, performance-based asset that banks can trust and use to underwrite loans.
The policy pathway to scaling success
The success of the Affirmative Procurement policy will not be judged by the number of laws passed, but by the number of women-led businesses that scale from micro-enterprises to stable SMEs.
By mandating digital transparency within the procurement process and using that data as the basis for financial assessment, states can achieve two goals simultaneously: securing public funds through better auditing, and unlocking billions of Naira in working capital for Nigerian women entrepreneurs.
The policy architecture is in place; now, we must ensure its digital foundation is strong enough to carry the weight of real economic empowerment. This data-to-collateral pathway is the non-negotiable next phase of the Affirmative Procurement revolution.
- Precious Ebere-Chinonso Obi is the CEO of Do Take Action and independent consultant on edtech, climate change, public policy, and women’s procurement empowerment
