What Is Al-Qard Al-Hassan, Hezbollah's Main Cash Source Targeted By Israel

New Delhi:

Israel recently targeted branches of Al-Qard Al-Hassan (AQAH), a financial institution linked to the Iran-backed Lebanese militant group Hezbollah, with precision airstrikes. The strikes hit across Beirut's southern suburbs, southern Lebanon, and the northeastern Beqaa Valley, areas known as Hezbollah strongholds. These attacks, which spanned late Sunday night into Monday morning, are part of Israel's effort to cripple Hezbollah's financial infrastructure and weaken its ability to fund operations.

The Israeli Defense Forces (IDF) confirmed that at least 11 branches of AQAH were struck, in a campaign aimed at dismantling Hezbollah's access to vital financial resources.

What Is Al-Qard Al-Hassan?

Founded in 1983, Al-Qard Al-Hassan, which translates to "the benevolent loan," calls itself a charitable organisation adhering to Islamic finance principles, which prohibit interest. Its mission is to provide interest-free loans to Lebanon's Shiite population, particularly those aligned with Hezbollah. AQAH offers loans against collateral such as gold or jewellery, offering much-needed credit to a Lebanese population battling a declining economy.

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Al-Qard Al-Hassan allegedly operates 30 branches across Lebanon, with many located in Hezbollah-controlled areas of Beirut. Its influence surged after Lebanon's financial collapse in 2019, as traditional banks severely limited depositors' access to their savings. AQAH, on the other hand, continued to operate, allowing those who banked with it to withdraw cash - often in hard currency - when other financial institutions could not.

AQAH operates under a license granted by the Lebanese government. The US Department of the Treasury sanctioned AQAH in 2007, accusing it of serving as Hezbollah's financial arm. US officials contend that while AQAH may serve Lebanon's Shiite population, it is also used to move Hezbollah's funds through shell accounts, allowing the group to gain access to the international financial system, despite sanctions designed to cut off its resources.

Hezbollah's Use Of AQAH

Hezbollah, which emerged as a dominant force in Lebanon after Israel's 1982 invasion of the country, has long relied on hawala networks and financial mechanisms to build and maintain support, especially among Lebanon's Shiite population. Over the years, Al-Qard Al-Hassan has become a crucial element in Hezbollah's strategy.

In Lebanon, there are hawala systems that work as money-exchange houses and move large quantities of sums. 

Many Lebanese citizens, particularly Hezbollah's constituency, depend on AQAH for hard currency loans, with collateral as simple as jewellery or gold. While the average loan does not exceed $5,000, these loans are essential lifelines for those trying to pay for weddings, education, or starting small businesses. In recent years, Hezbollah has extended the invitation for all Lebanese, regardless of their sect or political affiliation, to utilize AQAH's services. The group has promoted AQAH as an alternative to the traditional banking system, which collapsed amidst the 2019 economic crisis.

Hezbollah's leadership has been open about the group's dependence on AQAH for financial support. After the organisation was hacked in 2020 and the names of its clients were leaked, Hezbollah's former leader, Hassan Nasrallah, publicly defended AQAH. 

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The Israeli Defense Forces (IDF) confirmed that one of the strikes targeted a vault underneath a hospital building in Beirut, which they claim held $550 million meant to fund Hezbollah's military activities. These financial resources, Israel argues, are essential for Hezbollah to continue purchasing weapons and paying fighters. Israeli defence officials have alleged that AQAH is responsible for safeguarding as much as $750 million a year in Iranian funding, in addition to revenues from Hezbollah's other criminal enterprises, including drug trafficking and money laundering.

Yoav Gallant, Israel's Defense Minister, signed an order on Monday designating AQAH as a terrorist organisation.