A Direct Selling Agent, or DSA, is a popular business role mainly associated with loan services. The DSA primarily works with banks and NBFCs, assisting them in acquiring potential loan borrowers.
They also oversee the entire loan process and assist clients in obtaining it. The DSA receives a commission from the bank or NBFC for each successfully disbursed loan.
In India, the DSA Franchise business is scaling new heights. Many people with an entrepreneurial mindset view it as a potential business opportunity.
Additionally, the growing demand for DSAs in the financial sector is a significant advantage. In short, DSAs help both customers and financial institutions find common ground.
What is the Direct Selling Agent (DSA) Franchise Business?
A direct Selling Agent is an individual who acts as a mediator between the loan borrower and the bank or NBFC.
The loan agent identifies potential borrowers and assists them in securing the most suitable loans. They also help them with loan approvals.
Lately, the demand for DSA Business has advanced notably. Moreover, finance enthusiasts consider starting a career there a highly lucrative business opportunity.
The DSAs assist clients in securing the right loans and help banks identify potential loan prospects.
For the uninitiated, the DSAs educate clients about loan products, assist them with documentation, arrange meetings between the bank and the client, and ultimately facilitate loan processing.
DSAs offer clients a range of loan products, including home loans, business loans, and personal loans. In addition, loan agents earn commissions from loan approvals and product sales.
In short, the more loans they sell, the more commission they earn. Both banks and NBFCs offer competitive commissions to their DSAs on successful loan disbursals.
Importance of DSAs in the Financial Sector
DSAs play a pivotal role in customer acquisition and loan distribution. While banks and NBFCs handle various financial operations, DSAs manage client acquisition.
Furthermore, the DSAs help with loan distribution. They manage the entire loan distribution process, reducing the workload for the client and the bank.
Individuals aspiring to become DSAs must join the DSA Program and obtain the necessary certification from the bank or NBFC.
Certified DSAs simplify customer loan processing by guiding customers through the application process, document verification, and seamless loan approval.
Additionally, DSAs adhere to the regulatory guidelines established by the RBI and banks to ensure transparency and streamline loan processing.
Compliance with the guidelines helps maintain credibility between financial institutions and customers.
Roles and Responsibilities of a DSA
Check out the roles and responsibilities of a DSA to understand how the DSA Franchise business operates.
- As a DSA, it is crucial to identify potential loan prospects and tailor their approach with the right financial products.
- Once you acquire the clients, the next step is to document their information. You must assist customers in completing their Know Your Customer (KYC) requirements. Additionally, you must complete the loan application forms.
- Next comes eligibility. The DSA must check if the client meets the lender’s eligibility criteria. If the client meets the requirements, the application will be processed further for approval.
- Besides, the DSA must also submit the applications to lenders.
- Above all, the DSA is responsible for following up with clients after loan approval and resolving their queries as needed.
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Types of DSA Franchise or Loan Advisor Businesses
There are two ways to start a Loan Franchise business. The DSA decides which way to choose.
Operating as an Independent DSA
To operate as an independent DSA, the loan agent must partner with banks or NBFCs. The DSA can tie up with any number of financial institutions.
He is also free to sell loan products to clients and make commissions. Moreover, this is a direct tie-up with the financial institutions.
In addition, the independent DSA is responsible for managing documentation and client interactions. Here, documentation refers to the entire application process.
Similarly, client interaction refers to guiding customers through the loan process. It also involves addressing their queries and ensuring a smooth loan processing flow, from application filling to loan disbursement.
Tying Up with a National DSA Aggregator
Another popular way to join the Loan Agent Program is to tie up with a national DSA aggregator.
Aspiring loan agents can connect with a well-established aggregator and operate within their network.
Additionally, working with a reputed DSA aggregator enhances the loan agent’s credibility and builds customer trust.
Moreover, the DSA can receive backend support from the aggregators, which helps streamline their tasks. Aggregators also provide technology assistance to DSAs.
With this technological support, DSAs can effectively track applications, manage client data, and speed up loan processing.
Becoming a Sub-Agent under a DSA
There is also an option to become a sub-agent under a DSA. You can become a sub-agent if you cannot handle the roles and responsibilities of an authorised loan agent.
If you aim to be part of the Loan Agent Business, you can become a sub-agent under an established Direct Selling Agent (DSA) and earn smaller commissions.
Furthermore, the sub-agent can have less responsibility and lower earnings. If you are happy with lower earnings, you can join the DSA business as a sub-agent.
Difference Between DSAs and Loan Agents
Although the roles of DSAs and loan agents may seem similar, their responsibilities vary significantly. Let’s examine the differences in the Direct Selling Agent Business.
- DSAs collaborate with multiple financial organisations, whereas loan agents collaborate with only one financial institution.
- Additionally, DSAs offer a range of financial products, including loans, credit cards, and insurance.
- However, as the name says, loan agents are only responsible for selling loan products to clients.
- DSAs also operate independently by collaborating with financial institutions or large aggregators.
- On the other hand, loan agents work under direct payroll.
Eligibility Criteria to Start a DSA Franchise
Here are the eligibility criteria for participating in the Direct Selling Agent Program.
- The aspiring loan agent must be at least 18 years old.
- The individual must have a minimum 10th or 12th pass certificate to qualify. However, some banks may prefer higher qualifications than this.
- Additionally, the person must possess basic financial knowledge about loans and their processing.
- Additionally, possessing practical communication skills when pitching the loans is crucial.
How to Become a DSA (Direct Selling Agent)?
Here, we have curated the steps to become a DSA. By following these steps, you can quickly join the Loan Agent Program.
Step 1
Select the bank or NBFC with which you want to partner. You can research and find the financial institution that fulfils your requirements.
Also, you can check their DSA programs and the commissions they offer.
Step 2
After finalising the Bank/NBFC, you must submit your documents and application form to participate in their loan agent program.
The documents include a PAN card, an Aadhaar card, and address proof, among others.
Step 3
Read the terms and conditions of the Bank/NBFC and sign an agreement.
Step 4
After onboarding, you will receive rigorous training on financial products, client acquisition, and loan processing.
Step 5
You are ready to start operating as a DSA and can begin acquiring loan prospects for your lender.
How Much Can a Loan Agent Earn?
In the Loan Agent Business, the DSAs can earn handsome commissions from the lender organisation. However, the commission is purely based on the type of loan product sold.
Additionally, the commission varies from lender to lender and from one loan product to another. For example, some banks offer 1% to 2% commission on approved home loans.
Furthermore, the earning potential for a DSA is relatively high. The minimum a DSA can earn is Rs. 20,000, which can increase to Rs. 2 lakh per month, depending on the client base.
DSA Franchise or Loan Agent Business – Conclusion
Owning a DSA Franchise business is a mighty opportunity at the moment. Given the increasing financial awareness among ordinary people, the role of a DSA has expanded significantly.
He bridges the gap between lenders and borrowers, making loan disbursal smooth. Additionally, this business does not require further investment despite having a high earning potential.
Moreover, DSAs can earn a substantial income through commissions if they satisfactorily fulfil their roles and responsibilities.
