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Creating a beneficiary on the Lendsqr admin console
When a borrower takes out a loan for a specific purpose such as paying school fees, buying equipment, or purchasing goods through a Buy Now Pay Later arrangement, there is often a strong case for sending the funds directly to the intended recipient rather than to the borrower. This is where beneficiaries come in.
A beneficiary is a third party whose bank account a borrower’s loan can be disbursed into upon the borrower’s request. Instead of the borrower receiving the funds and making the payment themselves, the lender transfers the money directly to the beneficiary’s account. This keeps the loan purpose-driven, reduces the risk of misuse, and gives lenders full visibility into where funds are going.
This guide explains why beneficiaries matter, who can manage them, how to create one step by step, and how to select a saved beneficiary when approving a loan.
Why beneficiaries matter
Beneficiaries are one of the most effective tools a lender can use to ensure loan funds are used for their intended purpose. By directing disbursements to a verified third party, lenders reduce the risk of fraud, improve transparency, and make it easier for compliance and operations teams to track how loans are being used.
Here are two real-world examples that illustrate how beneficiaries work in practice:
Scenario 1 — Educational loan A borrower named Tolu applies for a ₦500,000 educational loan to pay her university fees. Instead of receiving the funds directly, she requests that the payment go straight to ABC University’s bank account. The lender creates ABC University as a beneficiary on the Lendsqr admin console, and when the loan is approved, the funds are disbursed directly to the university. Tolu’s fees are paid, the loan purpose is fulfilled, and the lender has a clear record of where the funds went.
Scenario 2 — Buy Now Pay Later (BNPL) loan A borrower named Chuka wants to buy a laptop using a BNPL loan. The lender pays TechStore Ltd directly as the beneficiary, ensuring the funds go to the vendor and not into Chuka’s personal account. The vendor receives payment, Chuka receives the laptop, and the lender can confirm the loan was used for its approved purpose. For more on third-party disbursements, read how to disburse a loan to a third party.
Beyond these scenarios, beneficiaries are useful for any lending product where the destination of funds needs to be controlled, including supplier financing, medical loans paid to hospitals, and agricultural loans paid to input suppliers across different markets.
Before you start
Before creating a beneficiary, confirm the following:
Roles and permissions Not every admin can create or manage beneficiaries. To view, create, update, or delete beneficiaries, a team member must be assigned a role that includes the “Beneficiaries” permission. To review or update roles and permissions, navigate to Settings and select “Roles and Permissions”.
Subscription plan The ability to view, add, and delete beneficiaries depends on your organisation’s subscription plan. If the Beneficiaries section is not accessible or the option to create a new beneficiary is unavailable, check your current plan and upgrade if necessary.
Bank account details Before creating a beneficiary, have the following information ready:
The beneficiary’s bank name
The beneficiary’s bank account number
The beneficiary’s email address
The beneficiary’s phone number
The beneficiary’s account name will be automatically retrieved by the system when you enter the bank account details, so you do not need to enter this manually.
Supported banks The Lendsqr platform supports name inquiry and account verification for any bank account within the Nigerian financial industry. Lenders operating in other markets should confirm which banks are supported in their region before attempting to add a beneficiary.
How to create a beneficiary on the Lendsqr admin console
Step 1 — Navigate to beneficiaries
Log in to your Lendsqr admin console using your work email address and password. On the left navigation pane, locate the Customers section, expand “Customer Management”, and select “Beneficiaries”. This will open the Beneficiaries page, where all existing beneficiaries are listed.
Step 2 — Open the new beneficiary form
Click the “New Beneficiary” button at the top of the Beneficiaries page. A modal will appear with a form for entering the new beneficiary’s details.
Step 3 — Enter bank details
Select the beneficiary’s bank name from the dropdown and enter their bank account number in the field provided. Once the account number is entered, the system will automatically verify the details and retrieve the account name. This confirms that the account exists and belongs to the intended beneficiary.
Step 4 — Enter contact details
Once the account name has been confirmed, enter the beneficiary’s email address and phone number. These details are stored for contact and notification purposes.
Step 5 — Save the beneficiary
Click “Save Beneficiary” to complete the process. The beneficiary’s details including their name, account number, bank name, email address, and phone number will now be stored and visible on the Beneficiaries page.
How to select a saved beneficiary during loan disbursement
Once a beneficiary has been created and saved, an admin can select them during the loan approval process to disburse funds directly to their account. Here is how the process works:
Navigate to the specific loan request you want to approve and click the “Approve Loan” button at the top right corner of the loan details page.
A modal will appear informing you that you are about to make a transfer to a third party. Click “Continue” to confirm you want to proceed with a third-party disbursement.
Select the saved beneficiary from the list of existing beneficiaries displayed on screen.
The system will display a confirmation page showing the selected beneficiary’s details and the loan amount to be disbursed. Review the details carefully to confirm they are correct.
Confirm the selection. The system will change the loan status to approved and disburse the funds directly to the beneficiary’s bank account.
Direct disbursement Funds reach the intended third party without delays or detours through the borrower’s account. This is particularly valuable in markets where lenders need to ensure that loan funds are used for specific, approved purposes.
Fraud prevention By directing funds to a verified beneficiary account rather than the borrower, lenders reduce the risk of loan misuse. The bank verification step adds an additional layer of security by confirming the account exists before it is saved as a beneficiary.
Clear audit trails Every disbursement to a beneficiary is recorded in the system, giving your operations and compliance teams a clear and traceable record of where loan funds went. This is especially important for lenders operating in regulated markets where documentation of loan utilisation is required.
Improved borrower trust For borrowers with specific financial goals such as paying school fees, purchasing equipment, or buying goods, knowing that the lender will handle the payment directly reduces the administrative burden on them and builds confidence in the lending process.
By setting up beneficiaries on Lendsqr, your lending operations remain transparent, organized, and aligned with regulatory best practices.
