SIDBI and ONDC ink MoU to accelerate E-Commerce for Small Industries
Open Network for Digital Commerce (ONDC) in partnership with the Small Industries Development Bank of India (SIDBI) is aiming to democratise and accelerate the participation of MSMEs.
Mumbai, August 9, 2022: ONDC, a first-of-its-kind initiative to democratise the country’s e-commerce ecosystem has signed a Memorandum of Understanding (MoU) with SIDBI, the principal financial institution set up under an Act of Parliament for promotion, financing and development of the Micro, Small and Medium Enterprise (MSME) sector and for coordination of functions of institutions engaged in similar activities. The partnership is aimed to change the landscape of MSMEs by bringing them into the ONDC network and accelerating their participation in e-commerce.
The association between ONDC and SIDBI will establish a programmatic approach for MSMEs where sessions will be held first to educate them about ONDC, then masterclass sessions on ONDC protocol and MVP definition, followed by incentivised accelerator programs and finishing with participants and their ecosystems going live and being able to transact.
The MoU, signed by Shri Sivasubramanian Ramann, CMD, SIDBI and Shri T Koshy, MD&CEO, ONDC, provides for several collaborative efforts by SIDBI and ONDC in helping MSMEs access open network e-commerce platform proposed by ONDC.
T. Koshy, MD & CEO, ONDC, said, “We are building a network of networks and through this MoU, we will connect the SIDBI network with ONDC, which will revolutionize the ecosystem of small industries. This initiative will be a driving force to initiate the participation of the small industries across the country onto e-commerce on a larger scale and enable their growth.”
S.Ramann, CMD, SIDBI, said “ SIDBI is very keen to ensure success of this important national initiative and it will leverage its strong relationships with all major MSME industrial clusters in the country starting with Morbi, Coimbatore and Ludhiana for engagement with ONDC. SIDBI will also facilitate engagement of ONDC with its network of partner grassroots agencies, inter-alia, working for market access to informal enterprises. Three partners being introduced to ONDC are Annapurna Finance Pvt. Ltd, Access Livelihoods Group and the women co-operative ‘Looms of Ladakh’. SIDBI will also use its strong presence in fintech ecosystem to explore e commerce embedded financing solutions.”
Incorporated on 31st December 2021, Open Network for Digital Commerce (ONDC), a Section 8 company is an initiative of the Department of Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce, Government of India build envisioned to create a facilitative model to revolutionize digital commerce, giving greater thrust to penetration of retail e-commerce in India. ONDC is not an application, platform, intermediary, or software, but a set of specifications designed to foster open, unbundled, and interoperable open networks thereby eliminating the dependency on a single platform.
Major ONDC objectives are as follows:
1. Democratisation and decentralization of eCommerce
2. Inclusivity and access for sellers, especially small and medium enterprises as well as local businesses
3. Increased choices and independency for consumers
SIDBI is the principal financial institution set up under an Act of Parliament for promotion, financing and development of the Micro, Small and Medium Enterprise (MSME) sector and for coordination of functions of institutions engaged in similar activities. Over the years, SIDBI has been instrumental in taking up various initiatives for the development of the MSME sector through credit and more importantly, credit plus activities.