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What is Direct selling agents (DSA) and How its work?

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DSA - Direct selling agents

If you are applying for a loan, you can directly apply it to the NBFC or the Bank, or you can apply it through agents known as DSA (Direct selling agents).

Who are Direct selling agents (DSA)

DSA full form is Direct Selling Agent. DSA’s job is to find potential customers for the bank or the NBFC they represent. DSAs are looking for people interested in taking a loan and will guide them through the process of it. 

DSAs connect the borrowers with the lender and take care of all the documentation required for the loan application. DSAs also do checks and due diligence to ensure that the provided documents are genuine.

A payout is provided to them for this effort that they put in for both the borrower and the lender. The payout they receive is a percentage of the loan amount, and this percentage depends on the type of loan sanctioned. In some areas, especially in rural areas, these DSAs are also known as business correspondents. And both in a rural and urban area this is a great and efficient way to make some extra money.

What Do DSAs Do?

DSAs not only connect borrowers to the lender but also they do a lot of other critical things, such as – 

  • Collecting all the important documents and loan applications from the borrower with care and effort.
  • Conducting due diligence and checks to make sure both the loan application and other documents are correct.
  • Ensuring that the documents provided by the lender to the borrower are genuine and are not forged documents.

Collecting and submitting all these documents along with the loan application form and DSAs are supposed to provide their DSA code so that the application can be traced back to them.

Advantages of Becoming a DSA

Becoming a DSA has many advantages. A DSA plays a crucial role in the lending ecosystem. A DSA helps the banks and NBFCs find appropriate borrowers. A DSA helps borrowers find an appropriate bank that is willing to lend them money. And lastly, it helps them to make money for themselves. And nowadays anyone can become a DSA: a housewife, a working professional, a self-employed, etc., and they can make extra money on the side.

The other benefits of being a DSA are –

  • You can work anytime you wish since DSAs work on flexible hours.
  • You get to be your boss as a DSA
  • You can earn a great payout in the form of commissions on the leads that you generate.
  • By becoming a DSA, you are becoming a part of the financial industry and credit industry, and these industries are one of the crucial industries of any economy.
  • You can earn an additional or side income from being a DSA. You don’t have to leave your current job you can do these part-time.
  • You can run this business without any risk, and also, this business does not have high expenditures. You can operate at minimum cost.
  • To become a DSA, you don’t need any higher educational qualification or special degree.
  • The bank or the NBFC  will also provide you with the necessary training. 
  • You just have to pass the lead that you have generated to the bank or the NBFC and the rest of the financial, and technical work will be done by the bank/NBFC.
  • With some NBFCs, becoming a DSA does not require any investment or deposit.

DSA Registration Process

Different banks/NBFCs have different registration processes. But this is the general process for applying  –

  • Visit the particular bank/NBFC and submit your application to the bank/NBFC
  • Make the payments if necessary.
  • The bank/NBFC will contact you after you have made the payment, and they will be asked to furnish a few documents.
  • After you submit your documents, they will verify them, and a legal team will perform a due diligence process, and your CIBIL score and credit history will be checked.
  • After verification and due diligence, a DSA registration agreement with the right stamp duty will be delivered to you if they don’t find any problem.
  • Now you have to fill in some required details, then sign the agreement, and submit it.
  • A DSA code will be issued by the bank or the NBFC.
  • Once you receive the DSA code, you can begin uploading and submitting loan applications and loan documents.

Direct selling agents (DSA) FAQs:

1. What is the full form of DSA?

DSA stands for Direct selling agents.

2. What does a DSA do?

A DSA helps borrowers to connect with lenders. They find people interested or are seeking a loan in the market and help them apply for a loan with the bank or the NBFC they represent.

3. What is an NBFC?

NBFC stands for Non-Banking Financial Company. It is a financial institution that offers various banking services but technically is not a bank since they are not allowed to accept demand deposits.

4. What are the types of NBFCs?

There are several types of NBFCs such as – Asset Finance Company, Loan Company, Mortgage Guarantee Company, Investment Company, Core Investment Company, Infrastructure Finance Company, Micro Finance Company, Housing Finance Company

5. Why do banks and NBFCs hire DSAs?

Banks and NBFCs hire DSA to bring more business to them. Since some people may not be familiar with some other banks and their banking structure, a DSA can help the person with the loan procedure, which also helps the banks/NBFCs.

6. Who can become a DSA?

To become a DSA, you don’t need any special degree or certificate. A housewife, a self-employed, a working professional, etc., anyone can become a DSA.

7. What are the requirements to be a DSA?

The eligibility varies from bank to bank or NBFC to NBFCs and job to job. For example, a housing loan provider may want someone who has real estate experience, while a vehicle loan provider may have some other requirements

8. What skills are required to be a DSA?

Most banks and NBFCs provide necessary training to their DSAs. For further enquire, you have to contact the bank or the NBFC that you want to join since every employer has different requirements.

9. Why DSAs are important?

DSAs are important since it helps banks to get more business, and also they help the borrowers with the loan procedure and also can help them some after-sales service.

10. How do DSAs earn money?

DSAs get a payout in the form of commission from the lead that they generate for the bank or the NBFC.

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