Small businesses form the backbone of any economy, and their success is required for the country’s economic growth. However, the success of the businesses depends largely on the tailored financial support that the banking system provides to these entrepreneurs.
Every business is different; thus, the requirement of capital is what needs to be gauged first by the DSA members, who can assess and complete the task of due diligence and release the fund on time so that the company can complete its operation.
In this blog, we will look at the role of the DSA partners and how they work hand-in-hand with the small business owners so that they can never get the capital crunch and propel the growth of the business.
1. The Small Business Landscape: A Crucial Economic Driver
Small businesses fill in the minor parts of the economy of a place that is crucial for the growth in that region.
For example, consider a bottle manufacturing factory in the local neighbourhood; this factory requires operational capital and thus needs to borrow for one industrial cycle. It can fully repay once it gets the payment.
The challenge these businesses often face is that they don’t get the proper financial assistance, so there is no incentive from the banker’s side to provide loans to this particular category. Due to this reason, the growth in that region stumbled, and the job opportunities that were created in that area were lost.
2. DSA Partnerships: Tailoring Solutions for Small Business Success
DSA partnerships are made by banks to uniquely understand the position of these borrowers and cater to them with a tailored approach that will provide benefit to the bank. Here, a business needs a personalized solution, which is required for that sector of the business.
Hence, a DSA member will offer those financial products that will fulfil the requirements of that business owner at that time. Once an owner gets a customized rate, then in that instance, one can get the actual amount for the business and invest in operations.
Banks, under the guidelines of the government and the central banks, look for ways through which they can facilitate business lending so that people with small manufacturing units can grow and establish a common thread of credit lines that they can always access based on their repayment history.
3. Niche Expertise: DSAs Catering to Industry-Specific Needs
Now, there are a lot of business individuals who have a niche expertise and want to build a business around that area.
For example, if a person wants to develop a solar panel that has a higher retention rate of energy saving, then in that instance, one needs the proper source of capital, which will help the individual to grow the business around that niche.
In those scenarios, a person needs to take advantage of getting loans from the bank and, for that, need to have a conversation with the DSAs. Now, from the bank’s perspective, it needs to understand the viability of the business and predict whether or not that will work.
To understand that situation, a DSA will come to understand the scenario of the person, and through that assistance, the banks and the borrower both will have the correct and accurate information, and they can avail the financial infusion in their business.
4. Building Financial Literacy: DSAs as Educators for Small Businesses
Various businesses don’t know the advantages of lending and fear that they might get into the debt trap. Here, a person can gain knowledge about the variety of financial products and their requirements.
A small business can gain that insight from the Direct Selling Agents who can make these businesses aware of some of the government schemes that are there to help these businesses meet the monthly and quarterly capital requirements for the payments.
It is this interaction between the small businesses and the DSA agents that leads to better financial literacy and helps a person to get a better offer and lending facilities that were previously not there.
