Adhering to the proverb “decapitating heads is a lesser evil than cutting off livelihoods”, Lebanon’s Hezbollah is confronting U.S. demands that the Lebanese state curb the financial loopholes that allow the group to fund and arm itself. Hezbollah places the Al-Qard Al-Hassan Association — its de facto private banking system — on the same level of importance as its weapons. Sources who spoke to Alhurra said the party is fiercely defending the Association, perhaps even more vigorously than it defends its arsenal. At a recent memorial ceremony, Hezbollah MP Raed Berro lashed out at the latest visit of a U.S. Treasury delegation to Lebanon, which met with senior Lebanese officials. He claimed the visit aimed to “impose conditions on the Lebanese people under false pretenses — specifically, to impose restrictions on Al-Qard Al-Hassan Association, which we consider a lifeline for ordinary and poor people.” The MP asked: “Why shoot arrows at an institution that serves all Lebanese citizens without discrimination?”
Though only a small number of non-Shiite Lebanese deal with Al-Qard Al-Hassan and benefit from its low-interest loans, the association has built an extensive financial network within Hezbollah’s areas of influence. It provides loans, credit facilities, salary deposits for employees of Hezbollah-affiliated institutions, and even issues special debit cards that allow withdrawals from its own ATMs. This entire system operates outside the supervision of the Lebanese state, beyond the reach of Lebanon’s monetary law and central bank authority. “It’s a completely closed financial ecosystem,” explained Lebanese economist Ali Nour al-Din in an interview with Alhurra.
A Western-Inspired Business Model, Repurposed
The Al-Qard Al-Hassan business model is not new. It was cloned from western financial cooperatives and credit unions — social non-profit financial institutions that lend without interest and charge only minimal service fees. The association was founded before Hezbollah’s formal inception, and the party later integrated it into its institutional network.
Hezbollah’s financial apparatus extends beyond Al-Qard Al-Hassan. It also includes Yusr Financial and Investment Company, which is on the U.S. sanctions lists. Yusr is funded by savings of and direct deposits of cash by Hezbollah party members, while Al-Qard Al-Hassan provides the loans.
Surviving Bombs and Sanctions
During the most recent war, the Israeli army targeted numerous Al-Qard Al-Hassan branches, destroying some of them completely. Yet these strikes appeared to have had little impact on the association’s operations. Some customers told Alhurra they had deposited gold (personal jewelry) in branches that were reportedly destroyed — yet later retrieved their deposits intact. According to sources familiar with the matter, Hezbollah anticipated the strikes and likely relocated gold and cash deposits to secure locations. In some cases, gold was stored in reinforced safes that were later recovered from the rubble, similar to what occurred during the 2006 war.
All pressures thus far — whether through Israeli military strikes, U.S. diplomatic demands via the Lebanese government, or central bank circulars banning transactions with Al-Qard Al-Hassan — have failed to disrupt the institution’s work, Nour al-Din said. This is because the association has no links to any bank and its lending model carries little credit risks, as most loans are secured by gold. If liquidity shortages arise, Hezbollah can cover them through alternative financing channels.
Exploiting Legal Loopholes
Hezbollah has taken advantage of loopholes in Lebanese laws, allowing the association to expand its activities nationwide. After the 2019 financial collapse and the paralysis of Lebanon’s commercial banks, even some non-Shiite Lebanese turned to Al-Qard Al-Hassan for loans, as conventional banks could no longer afford to lend.
The group uses the association as its own bank: paying salaries to fighters and staff, issuing compensation checks to war-affected people, and channeling internal transfers. This has become increasingly difficult to regulate amid Lebanon’s banking collapse and crisis of confidence. Nour al-Din cited World Bank estimates that around $10 billion in cash circulates annually in Lebanon, with most imports and exports are now being conducted outside the banking system. Hezbollah, he said, undoubtedly controls a significant share of that cash economy.
For this reason, the visiting U.S. delegation reportedly delivered strict demands to Lebanese officials that included closing down all of Al-Qard Al-Hassan branches nationwide, tightening oversight over money-transfer and exchange companies, and curbing the “cash economy” through reforms required by the World Bank.
A Parallel Economy
Nour El-Din notes that efforts to regulate Lebanon’s financial market face resistance not only from Hezbollah but also from parts of the banking elite— a powerful financial lobby that profits from the current “chaotic economy.” Hezbollah benefits from this disorder, too. He points to U.S. data indicating that about $1 billion has flowed into the group’s coffers since the cease-fire agreement took effect.
Throughout this period, Hezbollah has continued to pay salaries, finance its institutions, and compensate people affected by attacks. Nour El-Din says this is clear evidence that the group has thus far managed to bypass the economic blockade. Even though tighter monitoring at border crossings has limited the inflow of funds from Iran, Hezbollah has exploited Lebanon’s financial disarray to secure the money it needs through alternative channels.
Rami Al Amine
كاتب وصحافي لبناني يعيش في الولايات المتحدة الأميركية. حائز درجة ماجستير في العلاقات الإسلامية والمسيحية من كلية العلوم الدينية في جامعة القديس يوسف في بيروت. صدر له ديوان شعري بعنوان "أنا شاعر كبير" (دار النهضة العربية - 2007)، وكتيب سياسيّ بعنوان "يا علي لم نعد أهل الجنوب" (خطط لبنانية - 2008)، وكتاب عن مواقع التواصل الاجتماعي بعنوان "معشر الفسابكة" (دار الجديد - 2012) وكتاب بعنوان "الباكيتان- سيرة تمثال" (دار النهضة العربية- ٢٠٢٤)
