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3. Al-Qard Al-Hassan: Is Hezbollah's "Bank" in Jeopardy? (1/2)

Intense daily Israeli airstrikes continue on the southern suburb of Beirut, southern villages, and the Beqaa Valley, while the Israeli side affirms that its war will persist until it eliminates Hezbollah's military and organizational targets. The aim is to inflict as much strategic damage as possible on Hezbollah, including its financial resources, and to disrupt all internal and external supply lines managed by individuals overseeing the party's financial structure, many of whom are under US sanctions. This includes targeting the Al-Qard Al-Hassan association and other institutions affiliated with the party. So far, Hezbollah remains secretive about the extent of damage to its financial and organizational networks, which were considered the backbone of its security, military, and social cohesion.

For years, the US "Rewards for Justice" program has offered rewards ranging from 5 to 10 million dollars for information that could "disrupt Hezbollah's financial mechanisms" by providing details that lead to sanctioned individuals. Some of these individuals were later assassinated by Israel in Lebanon. A few months after the operation to lure "currency exchanger" Mohammed Srour, who was under US sanctions, to the Beit Meri area, he was killed by the Israeli Mossad, which admitted to the operation and accused Srour of receiving Iranian funds and transferring them to Hamas.

On October 1st of this year, Israel managed to assassinate Mohammed Jaafar Kassir in a raid targeting an apartment in the Jnah area. Kassir, also known as Sheikh Salah and Hussein Ghouli, was one of Hezbollah's key businessmen and one of the party's main financial backers. The US Treasury Department had previously sanctioned him for providing services and support to the Iranian Quds Force, the Houthis, and Hezbollah. Kassir led Unit 4400 for nearly 15 years and was considered the primary figure responsible for securing Hezbollah’s financing through international networks that facilitated the transfer of funds from Iran and Syria to Hezbollah in Lebanon. The US Treasury’s Office of Foreign Assets Control (OFAC) noted that Kassir established economic projects in Lebanon, Syria, and other countries, creating extensive networks to channel funding to Hezbollah.

Currency Exchange Offices: Suspicious Transfers

In recent years, as sanctions against Hezbollah and its financial network — including individuals and entities — have intensified, Hezbollah strengthened its ties with major currency exchange offices in Lebanon, especially in Beirut, the southern suburb, and the Beqaa region, including Chtoura. This was to secure alternative funding sources from individuals abroad and from businesses labeled "illicit" by the US Treasury and identified as part of money laundering activities. Investigations and financial surveillance revealed that Hezbollah used several exchange offices for money laundering, employing a different type of money transfer system. This parallel transfer channel enables individuals or armed groups to transfer funds without physical movement, using a credit and debit recording system. Since 2011, the US Treasury Department has imposed sanctions on several currency exchange offices in Lebanon. The latest sanctions included the Lebanese Central Bank freezing all bank accounts of Styx Exchange Company and its owner, Hassan Maqlad, following its inclusion on the OFAC sanctions list on January 24th, along with two of Maqlad’s relatives.

An Uncertain Future for Al-Qard Al-Hassan

The Al-Qard Al-Hassan association was established in 1982 and received a license as an "association" from the Ministry of Interior in 1987, but it never obtained a license to operate as a financial institution. Despite this, it bypassed regulatory authorities, including the Central Bank of Lebanon and the Banking Control Commission, and began expanding throughout Lebanon with extensive media and advertising campaigns. The association finances the loans it grants using deposits from wealthy individuals and what it describes as "philanthropists" who wish to invest their money in charitable activities, along with investors and financiers. It provides loans secured by pledged gold. The association also collects monthly installments on "bonds" repaid by borrowers, and it earns monthly fees from depositors and donations from Hezbollah's supporters and its institutions. Some describe Al-Qard Al-Hassan as "Hezbollah’s black bank."

In detail, the association offers interest-free loans against collateral, such as gold or third-party guarantees. Its primary role started with offering personal loans to individuals in exchange for "pledged" gold, investment project loans, monthly loans for those who deposit "savings" with the association, and loans backed by guarantees from wealthy individuals, as well as loans to finance solar energy installations worth up to $5,000 for individuals and $35,000 for municipalities. According to unofficial data, the association’s loan portfolio increased from $76.5 million in 2007 to $476 million in 2018, reaching $480 million in 2019, benefiting over 200,000 people. The total transaction volume of the association until 2019 is estimated at around $3.5 billion. This figure has likely risen since Lebanon's economic crisis erupted in 2019, as Al-Qard Al-Hassan took advantage of the cash economy, which the World Bank estimated at $9.9 billion in 2022.

Al-Qard Al-Hassan gained prominence after Lebanon's 2019 crisis and the collapse of the banking sector, positioning itself as the "alternative institution" to the formal, legal banking system, attracting many citizens, most of whom are from Hezbollah's community. The collapse of Lebanon's legitimate, organized economy since 2019 and the rise of a parallel, unregulated financial system that operates outside state oversight cannot be seen in isolation. Notably, following the economic downturn, these institutions installed ATMs near their branches and in areas under Hezbollah's influence to serve depositors, turning the "association" into a de facto bank beyond the control of the Lebanese state and Central Bank directives. In recent years, Al-Qard Al-Hassan has expanded across Lebanon, with 50 branches and about 500 employees.

Israeli airstrikes in Lebanon have targeted branches of Hezbollah-affiliated "Al-Sajad" cooperatives, intended for the poorest families, as well as Al-Qard Al-Hassan branches in Beirut's southern suburb. Since then, calls from depositors to the branches have increased, but there is "no response," raising questions about the fate of Al-Qard Al-Hassan and the funds deposited there, as well as the quantities of gold held as collateral for loans.

After the attack on Hezbollah's General Command center in the southern suburb, which some observers believe also housed central funds and gold reserves of Al-Qard Al-Hassan, depositors were left in a state of confusion about the fate of their funds and gold collateral. The status of these deposits and gold remains unknown. If lost, this would impose significant pressure on the families who relied on Al-Qard Al-Hassan. The association is considered one of Hezbollah's main economic pillars, operating outside the Lebanese financial system and not subject to Lebanese banking laws.