DSA and their role in India’s Credit Sector
India’s financial landscape has a huge credit gap which poses a huge opportunity for Banks and Financial Institutions. But reaching the right customers has been a roadblock for the lending institutions. This is where Loan DSAs (Direct Selling Agents) come into picture.
Who is a DSA?
A direct selling agent (DSA) acts as an intermediary between the borrower and the lending institutions. They partner with the lending institution to promote and sell their loan products. They source customers and help facilitate the entire loan application process.
DSAs generally work independently and have a partnership with the lending institution. They build a selling network, and they ensure a smooth experience for both the borrower and the lender.
Loan DSAs for NBFCs and Banks
- Broad reach and Network
| For the Borrower | Small business owners find it hard to contact NBFCs directly due to lack of information and awareness |
| For the Lender | Lenders can expand their reach to multiple locations through DSAs which reduces their operational expenses |
- Product Awareness
| For the Borrower | DSAs help borrowers identify the kind of loan products that would be best suited for them |
| For the Lender | Lending institutions keep adding various loan products in their profile based on customer demands. DSAs help them promote and create awareness for the same |
- Loan Application Process
| For the Borrower | The loan application process involves several steps starting from data sharing till the final terms. A DSA will assist the borrower to understand the requirements of the lender and get better terms. |
| For the Lender | DSA helps streamline the entire process which reduces TAT for the loan process |
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Become a DSA
- DSAs are self employed and generally get flexible working hours. They build their own selling network.
- DSAs earn through commissions from case-to-case basis. DSA commissions are a good source of extra income for them
- DSAs require minimal overhead costs. There’s no need to establish a physical office, hire an extensive workforce, or invest in technology infrastructure.
- A DSA does not require a high degree of education. They are hired for their selling skills and basic understanding of how businesses run.
- A DSA can partner with multiple lending institutions to find them the right customers for their respective loan products.
Challenges faced by DSAs
- Competition – New entrants in this category might find it difficult to establish a selling network quickly due to high competition. The market is getting saturated at a fast pace and low initial investment in this category increases competition.
- Consumer Trust and Awareness – At times, clients might be hesitant to work with new DSAs due to concerns regarding transparency and lack of financial knowledge. DSAs need to source good clients for the lenders to establish that trust.
- DSA Eligibility Criteria – Some financial institutions have stringent eligibility criteria for DSA registration which reduces the scope of work. DSAs should find institutions which fit their criteria and build a network from there.
- Digitization – With the onset of fintech platforms and digital lending platforms, some DSAs might find it difficult to switch from their traditional loan processes. It is imperative for DSAs in today’s age to get familiarized with the changing processes.
Conclusion
How to apply for NBFC DSA registration online?
- Register online here by filling in your basic details, including your PAN and Aadhar numbers.
- Ensure your name is as per the Aadhar Card & the birth year is the same as registered with the Aadhar Card.
- Read the automatically generated NDA and sign it using Aadhar verification.
- Our team will verify your KYC and approve your application.
- Once approved, you will receive an email from our team.
- Update your profile with your Aadhar and PAN images at the top right corner.
- You can now upload loan applications online and start earning commission by helping small businesses get the loans they need.
This process is entirely free of cost, and we look forward to having you as our partner and contributing to our mission of creating long-term value for businesses. If you have any questions, please don’t hesitate to contact us.
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About Red Fort Capital
Red Fort Capital is dedicated to empowering Indian MSMEs (Micro, Small, and Medium Enterprises) on their path to business growth through customized business loans. We understand that securing a business loan in India can pose significant challenges, particularly when factors like a less-than-ideal credit score, a relatively short business history, unclear financial records, or variable cash flow come into play.
As a respected Non-Banking Financial Company (NBFC), we take pride in offering a diverse range of secured business loans, spanning from 1 to 10 Crores. What sets us apart is our remarkable ability to disburse funds fast, in just 7 days. Our financial solutions are meticulously designed to cater to a spectrum of needs, including working capital requirements, equipment and machinery purchases, invoice/bill discounting, and last-mile financing, among others.
