Digital platform seeks to simplify the procurement process for SMEs

Marvin Tumbo

Marvin Tumbo is the co-founder and CEO of Scale. The firm has digitised the procurement process.

Photo credit: Pool

In 2013, when the then government announced that it would be reserving 30 per cent of all state procurement opportunities for the youth, women and persons living with disabilities, Marvin Tumbo, Comark Maloba and Brian Mungeri, like many other young Kenyans then, were excited that they had finally gotten the opportunity they needed to take their business to the next level.

Amidst all the excitement, however, little did the trio know that they would encounter so many bottlenecks in the tender application process, let alone delivery, that would almost completely discourage them from ever again attempting to apply for another tender.

“To begin with, when we got to the National Treasury to apply for the Access to Government Procurement (AGPO) certificate, which was required to qualify us for the category we were applying, we got such long queues that we almost gave up,” begins Marvin.

He says women, youth and even persons living with disabilities had to travel all the way to Nairobi from different parts of the country to receive the AGPO certificate, whose application was being done manually.

It cost Marvin and his team more t and simplify the undertaking for them, enabling them to even compete against large organisations with han Sh20, 000 to apply for the tender, print out the documents and submit their application. Even after all that, they still did not secure the tender. They kept on applying, and it in fact took them three years before they won their first tender.

“The tendering process is so technical for small businesses and the barriers to entry too high. A report released in 2018 showed that between 2013 and 2017, the government had set aside up to Sh1.2 trillion for women and youth businesses, however by 2018, only Sh74 billion had been won by this disadvantaged group. This made him realise that the market needed a solution that would educate SMEs on the tendering process, as well as simplify the undertaking for them, therefore enabling them to even compete against large organisations that have entire procurement teams.

And so, in 2020, Marvin, Comark and Brian, leveraging on their backgrounds in communication, technology and management, embarked on a journey to launch Scale, a digital platform that sought to simplify the procurement process for SMEs in Kenya.

They began by raising Sh10 million from idea.org, an organisation that finances innovative start-ups to develop their ideas into workable solutions by first engaging their customers closely to know what it is they are missing. For almost a year, they went around talking to SMEs owned by women, youth and persons living with disabilities to find out what the ideal solutions for them would look like.

“We finally launched the first iteration of Scale in 2021. Within months, we had around 4,000 suppliers that were signed up to the platform,” notes Marvin.

The platform had a document management module where businesses could upload every document that they needed to respond to a tender. Ninety percent of the process had been digitised, however, businesses were still not willing to pay to use the platform.

“We realised that when people were responding to the tenders digitally, the procuring entities were still manual. That meant that the SMEs still had to print the same tender, take it to the lawyers for stamping, then submit manually, so even though we had tried to reduce some inefficiencies, the cost of submission was still high.”

Marvin and his team started talking to procuring entities to see if they could agree to digitise their processes as well. Many were willing to embrace digitisation, they, however, argued that the available digital procuring solutions were expensive. With this in mind, the Scale team developed solutions whose prices varied depending on the needs of the company, with some going for as low as Sh20, 000 a month, and others up to Sh250, 000 a month.

Fast forward to the year 2023, and the business has so far managed to onboard over 100,000 SMEs to the platform. The firm has also managed to sign up a number of buyers and procuring entities.

Marvin says that for a supplier, instead of taking two weeks to respond to a tender, it could take them a matter of minutes to respond on Scale. Similarly, a buyer could take a week or two to initiate, publish and evaluate tender applications instead of the initial average of two months. Banks can also leverage the platform to assess a borrower’s record.

“Most of the suppliers who win contracts fail to deliver because banks do not provide them with the financing. This is because there are so many cases of people who have printed fake tenders and used them to apply for loans. All the information needed to support the contract is on our system, it is also verifiable, making it less risky for the bank,” explains Marvin.