How to Start a DSA Business in 5 Easy Steps

Direct Selling Agents (DSA) are independent agents hired by financial institutions to sell loans and other financial products such as insurance and investments. 

 

They earn commissions and bonuses when their clients avail financial services from their suggested bank or NBFC. Also, they can earn bonuses for referrals. So, if you are looking for start a DSA Business, check the eligibility first and proceed with the steps listed below.

 

Eligibility Criteria 

 

Here is the criteria to check whether you are eligible to be a DSA:

 

• Must be above 18 Years of Age.
• Citizen of India
• Have a graduate degree.
• Must clear the interview.
• Have a CIBIL score between 750-900.
• Maintain a good credit history.
• Experience in the Banking Sector is a plus point.

 

5 Steps to Start a DSA Business

 

The most crucial part of starting a DSA business is having a great network.

 

There are a few things that you need to know when you are looking for how to start a DSA business and be successful. 

 

You will need to create a channel, find leads, and learn the ropes of marketing. Thus, follow the step-by-step process below to start a DSA business with ease.

 

• Register as a DSA (Direct Selling Agent)
• Understanding the Business
• Planning
• Set up your Office
• Network and Find Clients

 

Step 1 - Register as a DSA (Direct Selling Agent)

 

1. Visit the bank or NBFC you wish to be the DSA for.
2. Fill out and submit the application for DSA Registration.
3. Make the payment (if necessary).
4. Share the mandatory documents (listed below).
5. Qualify the due diligence and background check conducted by the bank's legal team.
6. Share your CIBIL score and credit history.
7. Sign the agreement with the bank.
8. Receive the DSA Code. (11 Digit Alpha-Numeric Code)

 

Once you get the DSA Code, you can use it for uploading and submitting loan documents.

 

The DSA Code is only valid for the state you applied it for. 

 

For example, if you applied in Rajasthan, you can only use your code in the loan applications for the banks in Rajasthan.

 

Documents Required for DSA Registration

 

• Identity Proof (PAN Card, Aadhaar Card, Passport, Voter ID etc.)
• Address Proof (Utility Bill, Aadhaar Card)
• Details of Bank Transaction (Last 3 Months)
• Form 16 or ITR Details
• Education Certificates and Degrees (Both school and college)
• 2 passport-size photographs
• GST Details

(If you expect your annual income to be below Rs. 20 lacs, you can skip it. But, if you expect it to be above Rs. 20 lacs annually, you must apply for GST Registration).

 

Step 2 - Understand the Business

 

The next step is understanding the industry. For this purpose, you will need to find out:

 

• Market size of the industry.
• Potential of business.
• Investment required.
• Roles and Responsibilities of a DSA.

 

Don't worry you will not have to search anywhere else for all this. 

 

Here is all you need to know.

 

Market Size of the Industry

 

According to the Economic Times, the Indian Direct Selling Industry crossed US $3.25 Billion and ranks 12th globally. 

 

Potential of Business

 

Home Loans and Auto Loans have a huge demand in India. Moreover, the service sector credit also grew from 3.8% in 2021 to 16.5% in 2022. The data shows the strong demand for loans in India. Therefore, it is safe to say that the market has good potential and is not saturated. 

 

Investment Required

 

Interestingly, starting a DSA business does not require any initial deposit, setup cost or investment. 

 

The only investment you might need is for setting up your office if you want to.

 

Roles and Responsibilities of a DSA

 

The role of a DSA is not only to connect borrowers to lenders but also to do the following critical things:

 

• Collecting important documents from borrowers and verifying their eligibility.
• Conducting due diligence to check both loan applications and other documents are correct.
• Ensuring that the documents provided by the lender are genuine and not forged.
• Providing the DSA Code in the loan application to keep the track of the status.

 

Step 3 - Planning

 

Once you have figured out the basics of the industry, you must plan your business properly to be successful.

 

It includes,

• Choosing whether you will work with nationalized or private banks. 
• Choosing the loan type you will assist with (Home Loans, Auto loans, Mortgage Loans, Personal Loans, Corporate Loans etc.
• Marketing Strategies 
• Ways to find potential clients

 

Therefore, when starting a Direct Selling Agent business, outline the goals, objectives and strategies for your business.

 

Step 4 - Set up your Office

 

The next step is setting up your office.

 

If you are applying for a DSA in a Nationalized Bank, you must rent the office space as they have stricter norms. 

 

But, if you are applying for DSA in a Privatized Bank, you can set up the office in your home unless stated otherwise.

 

The minimum area you will require for setting up a DSA office is 100 sq ft. - 150 sq. ft.

 

After that, make sure you have all the necessary things to keep in your office and set it up.

 

Step 5 - Network and Find Clients

 

There are many ways to find clients when starting a Direct Selling Agent Business. 

 

You can use your social media accounts, post flyers, or even go door-to-door.

 

Direct Selling Agents have the opportunity to network with people in their communities and meet new people as they go about their day. 

 

You can network in many different ways. You can attend networking events, join groups on LinkedIn, and reach out to people through social media. The key is to be genuine and respectful when reaching out to someone for the first time.

 

Income Source for DSA’s 

 

DSA’s get monthly Payout from the bank they are associated with. The percentage of Payout differs from bank to bank but on average it is around 2-3% of the loan amount per application.

 

Thus, if your lead is applying for a loan of Rs. 2 Crores, you can get a payout of up to Rs. 2 lacs - Rs. 3 lacs on approval.