The Al-Qard Al-Hasan Association, a financial institution linked to Hezbollah, is facing a systematic military campaign as part of what appears to be a renewed Israeli strategy aimed at undermining the group’s economic infrastructure and cutting off its funding sources.
After the association’s branches were targeted during the 2024 war between Israel and Hezbollah, the institution has once again become a primary target in the current conflict.
The renewed campaign appears aimed at eliminating its role entirely, after it resumed operations following the previous war.
Ongoing campaign
In addition to years of political pressure and sanctions, the Israeli army targeted several of the association’s branches in Beirut, the Bekaa Valley and southern Lebanon during the 2024 war, making the institution part of a broader multi-level confrontation involving military strikes, financial sanctions and political pressure.
During the 66-day war, most of the association’s branches were hit by Israeli air strikes. Despite this, the institution was able to resume operations after the ceasefire and continued to provide financial services.
Hezbollah also used the association to distribute aid and compensation to people affected by the war through checks issued in the group’s name. The group attempted to circumvent sanctions through an entity it called the Joud Foundation, intended to serve similar financial purposes.
But in February, the United States imposed sanctions on it, saying it was being used to ensure the flow of funds from Iran to Hezbollah.
Attempt to eliminate it completely
In the current war, Israel has intensified its strikes against the association in a systematic manner. The Israeli military has clearly stated that all Al-Qard Al-Hasan branches are considered targets, a pledge it has carried out through strikes on most buildings housing its offices.
This has become a source of concern for residents, particularly because many of the association’s offices are located in residential buildings. Residents have therefore demanded that the offices be closed.
Lebanese security authorities have attempted to limit losses resulting from attacks on the association’s branches.
In this context, a decision was taken to close its branch in Sidon, southern Lebanon, and remove its sign on Thursday, following demands from business owners and institutions on the street and in neighboring buildings.
Authorities also evacuated the association’s branch building in Beirut’s Noueiri district on Friday following a decision by the interior minister.
It is also clear that the Israeli army is no longer only pursuing the association’s branches but also money storage facilities. Israeli military spokesman Avichay Adraee said on Thursday, after a strike on a building in the Bashoura area near central Beirut, that Hezbollah had hidden millions of dollars beneath the civilian building to fund its “terrorist activities.”
He added that the site was guarded by armed men and that access to the storage facility was through the building’s parking lot.
While Israeli strikes in 2024 failed to destroy what is often described as “Hezbollah’s central bank,” Israel, which views the association as a central element in financing Hezbollah’s activities and harmful to the Lebanese economy in the service of Iranian interests, now appears intent on weakening it fundamentally.
The goal appears to be depriving the group of one of its most important sources of economic and social influence in Lebanon.
Drying up resources a long and complex process
However, financial and economic affairs researcher Professor Maroun Khater said it is unlikely that Al-Qard Al-Hasan could be completely eliminated.
“Experience shows that such networks are often capable of adapting and finding alternative channels, which makes the process of cutting off resources long and complex,” Khater told Asharq Al-Awsat.
“For this reason, it is difficult to conclude that the blows suffered by Al-Qard Al-Hasan have led to the complete collapse of Hezbollah’s financial system, due both to the nature of the association itself and the diversity of funding sources that international reports say the group relies on.”
Khater added that despite the pressure, the association relies on a broad social network of depositors and borrowers who have used its services as an alternative to the traditional banking system, even before Lebanon’s banking sector effectively collapsed in 2019.
“This social base, along with political and security protection, has given it a certain capacity to endure, albeit within a limited scope, and has so far allowed it room to reorganize its activities whenever it is hit,” he said.
Fate of funds unclear
Khater also stressed that it would be simplistic to view the association as Hezbollah’s only source of funding.
Research centers and international institutions estimate that the group’s financing relies on a mix of sources, including foreign support, local economic networks, and donations, as well as various financial and commercial activities.
Some resources are also believed to move through individuals or private institutions that may remain outside full regulatory oversight, whether inside Lebanon or abroad.
For this reason, Khater said, it remains difficult to determine the true scale of the wealth accumulated by Hezbollah over past decades or to know what has happened to portions of its funds, gold reserves or other assets.
A parallel banking system under pressure
The Al-Qard Al-Hasan Association was founded in 1983 and operates more than 30 branches across Lebanon, including in Beirut, southern Lebanon and the Bekaa Valley. A broad segment of the public relies on it to obtain small loans or cash liquidity in exchange for gold or other assets pledged as collateral.
As Lebanon’s financial crisis worsened after 2019, the association’s role expanded, functioning in many ways as Hezbollah’s “parallel banking system.”
While banks suspended lending, Al-Qard Al-Hasan said it had issued 212,000 loans totaling $553 million in 2020 and 2021.
The US Treasury froze the association’s assets in 2007 and imposed additional sanctions in 2021 on several individuals linked to it, accusing the organization of collecting foreign currency to help Hezbollah build a support base.
The Treasury says that although the association claims to serve the Lebanese public, it actually transfers funds illegally through fictitious accounts and intermediaries, exposing Lebanese financial institutions to potential sanctions.
Lebanese authorities have also tightened restrictions. In 2025, Lebanon’s central bank instructed banks and financial institutions not to deal with unlicensed entities subject to sanctions, including Al-Qard Al-Hasan.
