Al-Qard Al-Hassan reportedly initiated a «post-liquidation» phase

Under the effect of American sanctions, restrictions imposed by the Banque du Liban, and losses sustained during the last war with Israel, Hezbollah has sought to reconfigure its main financial arm, Al-Qard Al-Hassan. This “repositioning,” presented as “legal,” aims to preserve its grip on the parallel economy and its social base.

Founded in 1982, the Qard Al-Hassan association operates outside the legal banking framework. Iranian funds initially contributed to the association's capital. These were supplemented by Lebanese capital, particularly from entrepreneurs in Africa, over several years.

According to the US Treasury Department, which listed Qard Al-Hassan in 2007 on its list of sanctioned entities and then strengthened these sanctions in 2021, this association manages financial volumes comparable to those of a medium-sized bank, while escaping all official supervision.

US authorities estimate that the network serves several hundred thousand beneficiaries across Lebanon, relying on significant tangible assets, including gold deposits used as collateral, without control from the Lebanese financial authorities.

Since the collapse of the banking system in 2019, Al-Qard Al-Hassan has established itself as a substitute for a sector described as “deeply insolvent” by international institutions, thereby strengthening the economic dependence of Hezbollah's social base and consolidating its financial and political power outside of any state structure.

Symbolic legitimacy

The policy of severe restrictions imposed since 2019 by the Banque du Liban – limitations on withdrawals, control of transfers abroad, and regulation of exchange operations – has created an environment conducive to the rise of unregulated financial structures. In this context, Al-Qard Al-Hassan has appeared to some as an alternative to the state and the banking sector, due to their failure.

The principle of Qard Al-Hassan, based on interest-free loans, gives this association strong symbolic legitimacy within the Shiite community. Hezbollah relies on this reference to present the association as a social work. According to political scientist Ali Hamadé, this symbolism is also strategic for the party's political influence: it has enabled it to penetrate social strata beyond the Shiite community, thus extending its economic and social grip. But in reality, Al-Qard Al-Hassan functions as a parallel banking network, manipulating large amounts of liquidity outside of any state control and beyond the official supervision of the Banque du Liban or the Banking Control Commission.

Ali Hamadé notes in this context that the association has entered a phase of so-called "post-liquidation," redistributing certain activities to other Hezbollah-affiliated entities, particularly in the gold sector. Gold purchase, sale, and pawning operations are now carried out via Joud, a commercial company with a tax number and a license, whose general manager from the Karnib family is sanctioned by the United States.

Banking-like activities are gradually being transferred to other legal structures, with operations presented as simple sales of goods, thus circumventing financial oversight.

The closure would be inevitable

Ali Hamadé further emphasizes that the timing of Al-Qard Al-Hassan's closure or control falls under the responsibility of the Presidency of the Republic, not the Ministry of Interior. This responsibility explains the caution in examining the case, particularly with the aim of avoiding financial disruptions for depositors and managing the symbolic impact of such an act on the Shiite community and beyond.

Facing international and American pressure, the closure of the association now seems inevitable, even if other structures continue to take over some of its activities.

This possible closure has been denied by the association, which states that it "continues to operate under its usual name, in all its branches in Lebanon." It specifies that gold purchase and sale operations, whether cash or installment, are carried out exclusively through legal commercial companies. This clarification illustrates the complexity of the progressive transfer of Al-Qard Al-Hassan's functions to entities like Joud, allowing for a legal distinction between commercial operations and quasi-banking activities.