Open Network for Digital Commerce (ONDC) has signed a Memorandum of Understanding with the Small Industries Development Bank of India (SIDBI).
The collaboration of SIDBI, the leading financial institution created for the promotion, financing and development of the Micro, Small and Medium Enterprises (MSME) sector, and ONDC, a unique initiative to democratize the e-ecosystem du commerce, is to benefit the country’s MSME segment of the ONDC’s digital network.
The Memorandum of Understanding, signed between Sivasubramanian Rammann, CMD, SIDBI, and T KoshyMD&CEO, ONDC, calls on SIDBI and ONDC to work together on a number of initiatives to support MSMEs’ access to the open network e-commerce platform offered by ONDC.
By integrating MSMEs into the ONDC network and enhancing their participation in e-commerce, the collaboration aims to transform the MSME market.
Sharing his point of view, T. Koshy, MD and CEO, ONDC, said, “We are building a network of networks and through this MoU we will connect the SIDBI network to the ONDC which will revolutionize the ecosystem of small industries. This initiative will be a driving force in initiating the participation of small industries across the country in e-commerce on a larger scale and enabling their growth.
The partnership between ONDC and SIDBI hopes to create a programmatic approach for MSMEs, starting with educating the segment about the ONDC and its protocol, the definition of MVP, and finally the participants and their ecosystems that will live and be able to transact.
Commenting on the collaboration, S. Rammann, CMD, SIDBI, said“SIDBI is very keen to ensure the success of this important national initiative and will build on its strong relationships with all major industrial MSME clusters in the country, starting with Morbi, Coimbatore and Ludhiana to engage with ONDC. SIDBI will also facilitate ONDC’s engagement with its network of partner grassroots agencies, among others, working for market access for informal enterprises.Three partners featured at ONDC are Annapurna Finance Pvt. Ltd, Access Livelihoods Group and the women’s cooperative “Looms of Ladakh.” SIDBI will also use its strong presence in the fintech ecosystem to explore in-vehicle financing solutions for e-commerce.
The Digital Commerce Company established in 2021 is an initiative of the Department of Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce, Government of India. It was designed to develop a model that would facilitate the digital commerce revolution and drive retail e-commerce penetration in India.
ONDC is a set of specifications designed to foster open, unbundled, and interoperable open networks, thereby eliminating dependence on a single platform. It aspires to democratize and decentralize e-commerce, increase access and inclusion for sellers, especially small and medium enterprises and local businesses, and give customers more choice and independence.
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While it was the main financial institution, SIDBI was established by an Act of Parliament. Through credit and, more importantly, credit plus activities, SIDBI has played an important role in a number of initiatives for the development of the MSME sector over the years.