BEIRUT — The Israeli Defense Forces have launched a series of airstrikes aimed at the branches of a financial entity linked to Hezbollah, alleging that this quasi-banking institution is being utilized to finance the militant group’s military operations.


On Sunday night, these airstrikes resulted in the destruction of over a dozen al-Qard al-Hasan branches across Lebanon. This military action follows a recent assassination of a prominent figure known as Hezbollah’s “finance minister.” After targeting several high-ranking Hezbollah officials, including the group’s longstanding leader, Sayyed Hassan Nasrallah, Israel has shifted its focus towards the financiers and financial networks that sustain the group.


Following the Hamas attack on southern Israel on October 7, 2023, which resulted in approximately 1,200 fatalities and the abduction of around 250 individuals, Hezbollah has retaliated by striking Israeli military posts along the Lebanon-Israel border, claiming it is supporting its allies in Gaza.


Al-Qard al-Hasan, which translates to “the benevolent loan,” is described as a non-profit charitable organization that operates outside of the traditional Lebanese banking system. It serves as an essential resource for Hezbollah’s support within the Shiite community in Lebanon. Alongside its military activities, Hezbollah oversees various institutions, including schools, healthcare facilities, and grocery stores, with al-Qard al-Hasan providing services that benefit hundreds of thousands of supporters.


The Israeli government asserts that al-Qard al-Hasan is involved in financing arms purchases and compensating Hezbollah fighters. Since 2007, the U.S. Treasury has imposed sanctions on the institution, alleging that it serves as a front for managing Hezbollah’s financial operations and accessing international financial channels.


Created four decades ago, shortly after Hezbollah’s inception, al-Qard al-Hasan grants interest-free loans and accepts gold deposits as collateral for credit, assisting individuals in financing educational expenses, weddings, vehicle purchases, or starting small businesses. The institution operates over 30 branches across Lebanon and became a vital resource for many during the financial crisis that transpired in 2019. Whereas traditional banks restricted withdrawals, customers were able to access their funds from al-Qard al-Hasan.


In 2021, U.S. authorities sanctioned seven individuals connected to al-Qard al-Hasan and Hezbollah. The following year, additional sanctions were imposed, targeting al-Qard al-Hasan’s director, Adel Mansour, among others. While Mansour has previously expressed pride in carrying the label of being sanctioned, he did not respond to recent inquiries.


A senior official from Lebanon’s central bank declined to comment on the Israeli military’s actions against al-Qard al-Hasan branches. David Asher, an expert on illicit financing, remarked that the focus on al-Qard al-Hasan signifies a crucial strategic move, labeling it as a central element of Hezbollah’s financial framework.


In contrast, Faysal Abdul-Sater, a Lebanese analyst specializing in Hezbollah matters, stated that al-Qard al-Hasan primarily supports low-income individuals, stressing that the institution itself does not fund Hezbollah. He characterized the attacks as symbolic.


The aggressive targeting of al-Qard al-Hasan branches follows a trend of violence that has previously decimated much of Hezbollah’s leadership and community support, which is expected to heighten anxiety among its followers. However, experts believe that the assault on these financial institutions will not significantly impact Hezbollah’s operational funding, which largely derives from Iran and other affluent backers globally.


Al-Qard al-Hasan issued statements assuring customers that it has safely relocated gold and essential deposits. Lebanese economist Louis Hobeika indicated that as long as financial support continues to flow from Iran and other sources, Hezbollah’s operations will remain unaffected.


Lina Khatib, an analyst on Middle Eastern affairs, noted that customers of al-Qard al-Hasan maintain confidence that Hezbollah will compensate them for any losses incurred. The operations of the financial institution, like any bank, persist beyond the physical branches that were targeted.


A Lebanese woman, who identified herself as Zahraa, described her experience of depositing jewelry for a loan, expressing a continued sense of loyalty to Hezbollah amid ongoing conflict.


Israel’s recent assaults on Hezbollah’s financing commenced earlier this month with a targeted airstrike in Beirut that killed Mohammed Jaafar Qassir, who was accused of transferring funds from Iran to facilitate Hezbollah’s operations. The U.S. had placed a monetary reward for information on disrupting Hezbollah’s financial networks.


Qassir played a crucial role in financing Hezbollah via various illicit means and was identified as a key link for financial transactions from Iran’s Quds Force, which supports Hezbollah’s activities. The Israeli military disclosed that he headed Hezbollah’s Unit 4400, responsible for transporting weapons from Iran to Lebanon and managing the development of precision missiles.


Hezbollah has not publicly addressed Qassir’s death. Shortly after his assassination, another airstrike attributed to Israel targeted his brother, Hasan, in Damascus, Syria.