Al-Qard Al-Hassan, which operates outside of the Lebanese banking sector, has been forced to stop payments multiple times before [Houssam Shbaro/Anadolu via Getty]
Hezbollah has suspended war compensation payments via its affiliated financial body, Al-Qard Al-Hassan Association, as the group faces deepening financial strain amid heightened scrutiny and disrupted funding from Iran.
The group announced a freeze on all check payments to Al-Qard Al-Hassan for individuals affected by last year’s war with Israel, effective 23 June and until further notice, according to the Lebanese news outlet Almodon.
No official explanation was given for the freeze. The New Arab reached out to Al-Qard Al-Hassan for comment but received no response.
Al-Qard Al-Hassan operates on an Islamic interest-free lending model and lies outside Lebanon’s formal banking sector. It has paused payments several times this year – sometimes for days, sometimes indefinitely.
A source told Almodon the latest suspension is “temporary”, citing operational difficulties. Another source did not deny that the institution was facing a liquidity crisis and said additional funds are needed to resume payouts.
Both sources claimed the number of unpaid checks remains small compared to those already processed. Some check holders reportedly approached local Hezbollah officials, who said the funds were unavailable but would be released soon.
Speculation is growing that Hezbollah is preserving its remaining cash in case full-scale conflict with Israel resumes. Frustration has been mounting in Hezbollah strongholds over the pace of aid distribution.
The year-long escalation between Hezbollah and Israel, including a two-month war, devastated large parts of southern Lebanon, Beirut’s southern suburbs, and eastern Beqaa towns – areas where Hezbollah maintains strong support.
Reconstruction has been sluggish, with Lebanon’s cash-strapped government appealing for international aid. The World Bank on Wednesday approved $250 million for rebuilding.
Al-Qard Al-Hassan’s branches were targeted by Israel during the war, and video footage had purported that money, gold and other valuables were lost in the strikes, but this wasn’t confirmed.
As well as facing heavy military and personnel losses, Hezbollah reels under a financial crunch as it struggles to compensate those who lost homes and businesses, with its main backer, Iran, also emerging out of its own war with Israel.
Lebanon has halted flights from Iran over suspicions that they were transporting funds for Hezbollah. Overland routes through Syria were also cut off following the ousting of Syrian President Bashar al-Assad, just weeks after the Lebanon war ended.
Israel continues to target Hezbollah’s financial network. On Wednesday, the Israeli military said it killed Haytham Abdallah Bakri, head of the Al-Sadiq money exchange network, in an airstrike in southern Lebanon. Bakri was accused of facilitating Iranian money transfers to Hezbollah.
Israel also confirmed it killed Behnam Shahriyari in Iran over the weekend. Shahriyari led Unit 190 of the Quds Force and reportedly managed the transfer of hundreds of millions of dollars annually to Iranian regional proxies, including Hezbollah.
An Israeli military spokesperson described the killings of Bakri and Shahriyari as “a severe blow” to Iran’s funding channels for Hezbollah.
