The financial company Al-Qard al-Hassan was targeted by Israeli strikes for its links to Hezbollah and the alleged financing of its activities, but in Lebanon in crisis, credits and banking services provided by the institution enjoy a strong popularity, particularly among the Shiite community.
Affected by American sanctions for many years, accused of serving as a front for Hezbollah for its financial activities, the organization with around thirty branches in Beirut and several other regions has been registered with the authorities since the 1980s.
The secret of its popularity: the application of the principles of Islamic finance, favoring the granting of interest-free loans. And above all, in a country carried away for five years by the spiral of economic collapse, the decay of traditional banks which almost no longer function and have withheld the money of the Lebanese.
On Sunday evening, Israeli strikes targeted subsidiaries of Al-Qard al-Hassan (the virtuous loan, in Arabic) in the southern suburbs of Beirut, a stronghold of pro-Iranian Hezbollah, but also in cities in the South and the East, in Tire or in the Bekaa plain.
In the evacuation orders that preceded its bombings, the Israeli army accused the institution of being involved “in the financing of Hezbollah’s terrorist operations.”
And Israeli officials say it bluntly: “the main objective is to weaken trust between Hezbollah and a large part of the Shiite community which uses” this institution as a bank, specified Sunday a senior official of the Israeli intelligence services.
Because Al-Qard al-Hassan is part of the network of associations, schools, hospitals and cooperatives serving Hezbollah supporters, which have established its popularity within the Shiite community.
“Lifebuoy”
Concretely, Al-Qard al-Hassan provides microcredits to artisans and small and medium-sized agricultural or industrial businesses. In a country that subscribes to electricity load shedding, it also offers loans to individuals and municipalities for the purchase of solar panels.
In February 2023, the institution promoted on its social networks “loans in Lebanese pounds guaranteed by [des dépôts] en or ».
When other banks had suspended credit due to the economic collapse, the association boasted of having granted 212,000 loans, with a total value of $553 million, “despite the crisis” in 2020-2021.
Al-Qard al-Hassan says it offers its loans “to all Lebanese”. Clients from the Christian and Sunni communities confirmed to AFP that they used her services and she ventured outside Hezbollah’s traditional strongholds.
“You deposit gold, they pay you its value in currency, and you pay back [ce prêt] without interest,” a customer confirmed to AFP, speaking anonymously due to current tensions.
The institution is “a lifeline for more than 300,000 Lebanese, who have deposited their savings there and count on the NGO for interest-free loans,” noted Hezbollah expert Amal Saad on X (formerly Twitter).
Iran helped create the organization in the 1980s, but it is now self-funded, mainly by the Lebanese Shiite community, she says. Because 85% of users come from this community.
“Escape supervision”
Deploring “collective punishment” of the Shiite community, Ms. Saad, a professor at the British University of Cardiff, told AFP that “Israel is targeting Al-Qard al-Hassan as part of its strategy aimed at further impoverishing a population already vulnerable and displaced” by the conflict.
The strikes illustrate “the failure of Israel which has failed to make significant incursions into southern Lebanon […] and which resorts to attacks against civilian institutions without military value.”
In Lebanon itself, Hezbollah’s detractors castigate the institution because it evades the regulations and controls of the banking sector.
This is not the first time that Al-Qard al-Hassan has been mired in the geopolitical tensions that have pitted Hezbollah and its Iranian sponsor in Washington for decades.
In 2007, the US Treasury froze its assets, imposing new sanctions in 2021 against several personalities linked to the institution.
The organization “is used by Hezbollah as a cover to manage the financial activities” of the movement “and to have access to the international financial system,” the US Treasury then accused.
The Treasury also accused Al-Qard al-Hassan of “hoarding” foreign currencies to “enable Hezbollah to build its own support base.”
“While it claims to serve the Lebanese people, in practice it illegally moves funds through fictitious accounts and facilitators, thereby exposing Lebanese financial institutions to potential sanctions. »
