In the world of high finance, it becomes mandatory for credit lenders to find suitable customers to whom they can loan at a substantial interest and, in return, earn the net interest margins.
Here come the DSA partners (Direct Selling Agents) of the banks and NBFCs who can provide these institutions the lead of customers to whom they can lend. Individuals and businesses both need the line of credit for multiple reasons and to make that accessible to the customers, direct selling agents come into the scenario to bridge the gap between both parties.
Here, we will discuss the role of these agents and how they are efficiently increasing the credit disbursal rate of the lending partners.
1. Customer Engagement
Agents are trained to engage with their customers to find accurate data regarding the customer’s job or business. It gives a proper financial scenario for the customer, which helps them to suggest a suitable loan amount that goes with their profile.
Depending on the loan amount, an agent tries to analyze the need for financial credit and how the customer is going to spend that amount. A business individual tends to look at whether the owner is taking a loan to sustain the business or to increase the rate of operation and expand in a different market or geography.
Then, depending on the need, it can judge whether the loan will be a risky bet or if the customer has a viable credit score, which makes them creditworthy.
2. Streamlined Documentation
Another significant aspect of the DSA partners is that they help the individuals to follow the documentation process smoothly. When a person applies for a loan, they need to go through a certain documentation process where the banks collect the necessary details of the customers.
Here, a loan agent helps the customer streamline the documentation process so that they don’t feel the need to go through a tedious process. It is also beneficial for the banks, as it helps them to achieve their goal at a much lower cost.
Here, the lending constitutions find it cheaper to hire a company that provides DSA agents rather than hiring individuals who will do all the work. Here, the company only needs to pay a certain amount from their financial benefit by disbursing a loan rather than keeping permanent employees and increasing the workforce.
3. Risk Mitigation
DSA partners are there who are trained and capable of identifying the risks. Due to their efficient process, it becomes evident that they are better suited to understand the financial goals of the company, and based on that, one can minimize the trouble of risky lending as these DSA partners are suitable to separate the creditworthy customers from the crowd.
It increases the loan book of the banks and the NBFCs with performing loans, and through that, it helps them to reduce their NPA (Non-Performing Assets) and to make the loan book healthy. This practice helps the bank to operate profitably and to increase its credit disbursal rate further.
4. Customer Education
Customer education is also part of the job for the loan agents, as they deal directly with the customer. Hence, they become the point of contact for the borrowers. The trust in a loan agent increases when that particular individual maintains transparency and shares all the necessary details about the loan.
For example, when a borrower is taking credit, he must have all the information about the rate of interest the bank is charging, whether that interest rate is flexible or fixed. Also, a DSA partner must educate the borrower on the importance of paying the interest amount in time to avoid additional charges in penalties and fines.
5. Impact on Credit Disbursal Rate
The presence of skilled loan agents helps a bank to attract a large customer pool, and they get all the necessary data about that particular individual’s financial scenario. The loan agents also ensure that the process of the loan application is accurate and fast, which reduces the chances of rejection and withdrawal.
All these aspects improve the business of the banks and the NBFCs, and also, it becomes beneficial for the loan agents as they get to keep a certain percentage of the interest from the loan amount.