In this financially inclusive market, the profession of direct selling loan agents is lucrative and can get incentivized by lenders. A person who follows a successful strategy in this industry will always stand out and can build long-term success.
One of the most popular and proven approaches of DSA for loans is to diversify the portfolio so that they can have a mix of a variety of customers and a variety of products which are essential for the mix so that the agent always remains stable even if there are some 2 to 3 defaults.
Here, we will delve deep into the role of diversification and how that can help a loan agent to become effective in this profession.
Section 1: Understanding the Importance of Diversification
Diversification is the option that a loan agent can take to reduce their risk profile and also to become effective in attracting a variety of clients, which will increase the payout and reputation of the agent in the market.
Reducing Risk Exposure
One of the first benefits of a diversified account or portfolio is that you don’t have to face the heat a lot when two or three of your clients default on the loan repayment at a single time. For example, a DSA partner who makes money out of the repayment commission can still sustain their business as the majority of their clients can pay the amount, which will allow them to have a minor exposure towards loan defaults.
Here, a loan agent needs to sell different types of loan instruments to a variety of customers from a varied financial background. If a person doesn’t diversify the portfolio, then they stay prone to defaults, and in those instances, it’s quite stressful for the agents also to recover the commission, and hence, it takes a toll on their earnings.
Enhancing Stability and Consistency
Diversification plays an important role when it comes to generating a stable income. For that, one needs to sell a variety of loans that come with shorter and longer repayment options. For example, a certain customer took a business loan, and for that year, the industry itself is down in that segment, so that the business will get affected.
Hence, the lender will miss the consistent loan payment, and that will also take a toll on the commission of the direct selling agents, which can impact the earnings. Here comes the diversified portfolio, which can cater to these challenges and can do a wonderful overlap of your income from different sectors where the businesses can repay and that fulfils your need and necessity.
Section 2: Types of Loans for Diversification
There are a variety of loans that are available in the market, and depending on that, one can offer different loans to customers. A bank or an NBFC that has a wide range of products can allow their DSA agents to take advantage of that bouquet of products, which they can then sell to the customers.
A person who has done the SBI DSA registration or from some other banks or NBFCs can offer a variety of products depending on the customer’s profile and hence can diversify their portfolio.
Consumer Loans
There are a wide variety of loans that fall under this category, and one of the prominent ones is a personal loan, which is a high-reward and high-risk loan offered to sell to customers. Apart from that, there are auto loans and debt consolidation loans that a person can take, and all of these fall under a personal loan profile.
Business Loans
It is one of the loans that is high-ticket yet secured as there are underlying assets under this loan instrument. Hence, from the seller’s point of view, this kind of loan is quite something to keep in the portfolio to minimize the risk exposure.
Hence, following these steps, one can find a way to hack through this role as a DSA partner and gain success in this industry.
