The lending industry is undergoing rapid change, which means lending organisations need to keep up with the pace while maintaining high levels of customer satisfaction. In addition, they must continue to tap into underserved markets and segments. This is where Direct selling agents (DSAs) present an innovative way to grow a client base while keeping costs low.

DSAs offer a personal touch to the lending process, acting as knowledgeable representatives who can guide borrowers through the application process. The benefits of the DSA model are clear: identifying potential customers, providing guidance and reassurance to customers, ensuring document authenticity, and building trust in the lender. 

Whether you're a small lender or a large industry player, integrating DSAs provides a cost-effective approach to scale up and enhance your lending operations. This is why, in this blog post, we will closely examine what DSAs are, the challenges lenders face in managing DSA networks, and how a DSA management module can help overcome these challenges.

Who Are Direct Selling Agents ?

DSAs help organisations bring direct business. Specifically, theyidentify potential customers for the bank or NBFC they represent. These experts guide borrowers through the loan application process and ensure that all necessary documentation is available and accurate. 

The role is crucial in connecting the borrowers with the lender and enables all required due diligence. 

A recent report states, "In India, the direct selling model is viewed as an independent industry and crossed Rs 19,000 crore in annual sales, growing 5.3% year-on-year for 2021-22.”

Why are DSA Operations Important for Lenders?

The importance of Direct Selling Agents lies in the fact that they are a vital source for loan origination. They can help banks and NBFCs identify potential customers, streamline credit approval processes, build loyalty with multiple clients, and enhance risk assessment and management. 

By working collaboratively with DSAs to get new customers on board, lenders can access a more extensive network of borrowers and develop long-term relationships.

Let's have a detailed look at the key benefits of DSA operations for lenders: 

1. For Building Loyalty With Multiple Clients

Direct Selling Agents can help lenders achieve customer loyalty with their reliable services and expertise in different types of loans. They are committed to meeting the customer’s requirements, thus assuring them that they will get a good deal. 

This strengthens the relationship between the customer and lender, as customers feel valued and trusted. As such, DSAs can help foster a loyal client base for lenders.

2. Enhancing Risk Assessment and Management

The knowledge of Direct Selling Agents in risk assessment allows lenders to make informed decisions when approving loans. By assessing the creditworthiness of each borrower, DSAs can detect any potential issues that could hinder the loan application process. This helps lenders determine which applicants are more likely to secure a loan and avoid risks associated with bad debt. 

3. Streamlining Credit Approval Processes

Direct Selling Agents are essential in streamlining the loan approval process and reducing paperwork. By preliminarily identifying customers who are more likely to be approved for a loan, they help lenders save time and optimise the application process.

What Are The Challenges Faced By Lenders With DSA Operations?

Despite the advantages personal and business loan DSAs possess, managing a network of DSAs comes with its challenges.

1. Mis-Selling

Mis-selling is one of the most common challenges that lenders face with DSA operations. This occurs when an agent tries to sell products or services to customers by emphasising features that do not benefit the customer or may not even be fully functional. For example, an agent may make false promises about the loan terms or downplay certain risks associated with borrowing money. 

A few years ago, the Reserve Bank of India (RBI) expressed concerns regarding DSAs due to potential risks of data theft and operational damage. 

2. Diffused Focus

Another challenge lenders face is that DSAs may have a diffused focus on their client’s needs and requirements. As such, when dealing with a large number of borrowers, they might be unable to provide personalised solutions or identify potential issues with loan applications quickly enough. 

3. Attrition

DSAs have the opportunity to work with multiple lenders, and may leave one for another. Retaining them would involve giving them access to tools that simplify borrower management, manage their visits, and improve their productivity.

4. Skills And Systems

To effectively manage DSA operations, lenders must ensure their agents have the skills and systems required for successful loan applications. This includes understanding credit risk management , marketing strategies, customer service, and industry regulations. 

Lenders must also invest in data systems to ensure their agents can process loan applications quickly and efficiently. 

5. Lack Of Transparency

Since DSAs usually act independently, lenders may not know what is happening at the ground level or whether their agents are using the right processes. This can lead to a lack of transparency, which may result in incorrect decisions or customers being mis-sold products and services. 

Firstpost reports , "An unclear or non-existent definition of Network of Sellers implies that the direct selling industry will continue to face hurdles and will not be able to realise its true potential.”

6. Turnaround Time (TAT)

As loan applications must be processed quickly, lenders must ensure that their DSAs  can process applications within the expected turnaround time (TAT). As such, lenders need to review the TATs set by DSAs and make necessary changes to improve their loan approval processes. 

TATs can vary depending on the type of loan and other factors, so lenders need to monitor their agents closely. 

These challenges demonstrate the need for lenders to be aware of the risks associated with Direct Selling Agents and ensure they have adequate systems to minimise such issues. That's why a well-established DSA Management System is significant for lenders who want to succeed in this sector. 

What Is a DSA Management System/Module?

A DSA management system, or module, is a robust platform designed for lenders to automate the management process of DSAs. With this system, organisations can gain a real-time, 360-degree view of DSA-led leads, enabling them to make data-driven decisions and take timely actions. 

The platform also features actionable insights, allowing businesses to optimise their funnels and boost productivity. Payouts are made on time with minimal intervention, providing banks or lending institutes hassle-free experience. Overall, a DSA management system is an intelligent solution enabling lending institutes to streamline their channel management process effectively.

Why Is FinBox Your Ideal DSA Management System?

FinBox's DSA management system is ideal for managing your DSAs. Our platform allows you to track your DSA-led leads, offers real-time data insights, and makes payouts on time. Our native, mobile-friendly dashboard creates a credit link for your DSAs to share with potential borrowers, ensuring a frictionless journey end-to-end. 

FinBox's DSA management system platform allows you to optimise funnels, boost productivity, get visibility into performance, improve approval rates, reduce TATs, and minimise DSA lead loan leakages. We provide all the tools and data you need to create a single source of truth. 

Let's have a detailed look at the key features of our DSA management system:

1. 360-Degree View

The integrated dashboard provides lenders with complete visibility into all the activities of DSAs, sub-DSAs, and beyond. This not only ensures accountability but also reduces the chances of any mis-selling. Lenders can see every stage of the loan application process, track loans, approvals, and disbursements. Ultimately, this helps lenders streamline the loan processing workflow and ensures that they are always up-to-date on the status of each loan application.

2. Real-Time Updates

Operational lags can lead to delayed turnaround times for loans. For instance, discrepancies in KYC documents submitted by users can result in back-and-forth communication and potential drop-outs. However, with FinBox's real-time view of every loan application, banks can quickly identify and resolve issues, ensuring that the loan process moves smoothly and efficiently. 

This feature also allows banks to prioritise leads, picking the best candidates for loans. With FinBox's real-time updates, banks can streamline their lending processes and provide their clients with faster, more efficient service.

3. Multiple-agent Engagement

FinBox enables you to engage multiple agents in your outreach efforts, increasing your reach and accelerating your sales process. Using FinBox, you can assign leads to various agents, enabling them to close deals much faster. This leads to faster conversions and ensures that no leads slip through the cracks as multiple agents are working on the same or different prospects simultaneously.

4. Accessible Loan Offers

With a real-time view of the loan, lenders can quickly trigger a loan offer when it reaches a certain stage, making the process much more efficient. To further improve accessibility, credit links can be generated and sent directly to the DSA via WhatsApp, reducing the need for phone calls or email correspondence. This streamlined process saves time and works in favour of banks looking to scale their digital disbursals. 

5. Agent Analytics

No matter how adept a software might be, it cannot override human nature. With the possibility of fraud, mis-selling, or attrition among DSA agents , lenders need to have the ability to track the performance of each DSA and identify those who might be underperforming. With Agent Analytics, lenders can run analytics across the entire DSA chain, giving them real-time insights into each agent's productivity. This enables them to improve the loyalty of their agents by providing personalised training and support, which ultimately ensures that they perform optimally and increase their productivity. 

6. Better Payout Management

Through the dashboard, which is equally accessible to lenders and DSAs, you can view the details of your monthly payouts as per the application funnel. Moreover, our system allows lenders to set rules that can automate payments at scale, making the process smoother and more efficient for everyone involved. With FinBox, you can trust that your payouts will be managed accurately and efficiently, giving you one less thing to worry about as you focus on growing your business.

Bottom Line

FinBox's suite of tools helps lenders streamline the loan process and manage their DSA relationships more effectively. With real-time updates, multiple-agent engagement, accessible loan offers, agent analytics, and better payout management, FinBox is your one-stop solution to make every stage of the loan application process smoother and more efficient. Through automated solutions and a comprehensive dashboard, lenders can now take digital lending to the next level.  

Request a demo today and see how FinBox can help you make your lending process faster, smarter, and more effective.