Hezbollah’s finances have been targeted by Israel of late with the Israeli military carrying out a wave of airstrikes targeting branches of the financial institution linked to the Shiite group.

Earlier this month, an Israeli airstrike destroyed the top two floors of a building in southern Beirut, killing Mohammed Jaafar Kasir, whom the US Treasury and Israel accused of funneling hundreds of millions of dollars from Iran to Hezbollah for years. The Israeli military said Kasir headed Hezbollah’s Unit 4400, which transports weapons from Iran to Lebanon, and oversaw Hezbollah’s development of precision-guided missiles.

Yesterday, Monday, the Israeli army announced that it had killed in Syria a senior official of the Lebanese Hezbollah, responsible for a large part of the financing of the Lebanese Shiite movement. The man, whose name was not revealed, was the head of the “unit 4,400” and “responsible for the Hezbollah fund transfers” that were secured mainly through the sale of Iranian oil, said Israeli military spokesman Vice Admiral Daniel Hagari.

After killing most of Hezbollah’s top political and military commanders, Israel is now going after the financiers and the financial institutions of the Shiite group in an attempt to weaken her further. Israel’s military has carried out a wave of airstrikes targeting branches of the al-Qard al-Hasan financial institution linked to Lebanon’s Hezbollah, saying the quasi-banking system is being used to finance the militant group’s military wing.

More than a dozen of its branches across Lebanon were destroyed in Sunday night raids two weeks after Kashir’s killing.

What is al-Qard al-Hasan and who benefits from it?

According to the Associated Press, Al-Qard al-Hasan is officially a non-profit charity that operates outside the Lebanese financial system and is one of the tools by which Hezbollah consolidates its support among the country’s Shiite population.

In addition to its military wing, Hezbollah has branches that run schools, hospitals, grocery stores as well as al-Qard al-Hasan, which benefits hundreds of thousands of its supporters.

Israel says the foundation finances arms purchases and is used to pay Hezbollah fighters. The US Treasury has sanctioned it since 2007, saying it is “used by Hezbollah as a front” to manage the militant group’s financial activities “and gain access to the international financial system”.

The foundation was established four decades ago, soon after the founding of Hezbollah. His name in Arabic means “the benevolent loan” and offers interest-free loans while also allowing people to deposit gold as collateral, allowing them to pay for school fees and weddings, buy a car or start a small business. People can also open savings accounts.

Al-Qard al-Hasan has more than 30 branches throughout Lebanon. After Lebanon’s economic collapse in 2019, the foundation provided a lifeline for many Lebanese. Unlike banks across the country that imposed limits on the amounts individuals could withdraw from their bank accounts, those with deposits at al-Qard al-Hasan were still able to withdraw their cash, without a limit .

In 2021, the US Treasury Department’s Office of Foreign Assets Control sanctioned seven individuals in connection with Hezbollah and Al-Qard al-Hasan. A year later, the Biden administration imposed terrorism sanctions on two others, including al-Qard al-Hasan director Adel Mansour, and two companies in Lebanon for providing financial services to Hezbollah.

David Asher, an expert on illicit financing who has worked at the US Department of Defense and State Department and is now a senior fellow at the Hudson Institute, said the Israeli attacks were a “big deal”.

“Al-Qard al-Hasan is part of Hezbollah’s central financial unit,” which is similar to its treasury, he said.

Faisal Abdul-Sater, a Lebanese political analyst who closely follows Hezbollah affairs, said the militant group is not funded by Al-Qard al-Hasan. The money deposited in the foundation belongs to individuals and companies, and the system benefits people with low incomes.

“This is a symbolic strike,” Abdul-Sater said of the targeting of the al-Qard al-Hasan financial institution.

How harmful are the Israeli strikes?

The systematic destruction of al-Qard al-Hasan’s affiliates, which comes after assassinations that wiped out almost all of Hezbollah’s top leadership and displaced hundreds of thousands of the group’s supporters, is sure to bring chaos and fear to Hezbollah’s support base . However, experts say that it is unlikely to hurt Hezbollah’s finances this by itself.

Al-Qard al-Hasan sought to reassure its customers, saying in a statement late Sunday that it had evacuated all its branches and moved the gold and other deposits to safe areas.

Lebanese economist Louis Hobeika said the destruction of al-Qard al-Hasan branches will have no effect on the funding of Hezbollah, as her money comes from Iran and her rich supporters from all over the world. The group’s salaries are known to be paid in dollars and in cash.

“As long as Iran and Hezbollah’s allies fund the group, it will not be affected,” Hobeika said, adding that “bags of cash” from abroad would continue to come in as in the past.

Lina Khatib, a Middle East-focused fellow at Chatham House, said al-Qard al-Hasan’s clients still believe “Hezbollah will be able to compensate them for their losses.”

A Lebanese woman who gave only her first name, Zahraa, for security reasons, said she needed cash and deposited a gold necklace and several rings earlier this year in exchange for an $800 loan. The woman said she was paying it off in monthly installments of $50.

“I don’t care if I get the gold or not at a time when men are sacrificing their lives in southern Lebanon,” Zahraa said, referring to the Hezbollah fighters fighting the Israeli invasion forces.