New name same network “Joud” as “Al-Qard Al-Hassan” alternative

Hezbollah in Lebanon has begun taking steps that are widely believed to lead to the closure of its financial arm, Al-Qard Al-Hassan, or at least to the marginalization of its role, following U.S. pressure and measures taken by Banque du Liban against the institution. These steps appear to fall within a policy of what is described as “legal repositioning” inside Lebanon, aimed at evading international and domestic pressure to shut it down.

As part of this approach, the party has established a licensed commercial institution that has started to carry out part of Al-Qard Al-Hassan’s activities, particularly lending to its supporters, amid expectations that other institutions may emerge to assume additional functions. Against the backdrop of international pressure on Lebanon to close the institution, Al-Qard Al-Hassan appears to have adopted a strategy of legal repositioning in search of lawful alternatives that would allow it to continue operating. This follows a series of domestic measures, including a decision by the central bank prohibiting dealings with the institution.

This came amid an official denial of the claims in circulation, with Hezbollah issuing a statement rejecting the accuracy of the media reports. In the same context, Al-Qard Al-Hassan Association released a clarifying statement in response to reports alleging a change to its name, stressing that it continues to operate under its officially registered name across all its branches throughout Lebanon and remains committed to its core role of managing interest-free loan activities within the community, linking charitable contributors with borrowers to meet various social needs. The association also clarified that the buying and selling of gold, whether in cash or by instalments, is not carried out directly by the association, but rather through duly licensed commercial companies operating in accordance with applicable laws and regulations, via their authorized representatives.

Despite Al-Qard Al-Hassan Association’s denial, signs of transformation have already emerged. The first manifestation appeared in the form of a commercial company specializing in the purchase and sale of gold by instalments, which was established and began operating in early December. Two sources in Beirut’s southern suburbs said they were surprised, after completing transactions, to receive invoices issued by an entity called “Joud”, rather than Al-Qard Al-Hassan.

According to available information, a new financially oriented institution registered under the commercial name “Joud” and subject to Lebanon’s commercial law specializing in buying and selling gold by instalments is expected to replace Al-Qard Al-Hassan after its closure, in order to continue Hezbollah’s financial activities. Indications of this shift became clearer when some clients noticed that invoices were being issued by “Joud.” The procedures have also changed: transactions are no longer conducted on the basis of gold pledged in exchange for cash, but instead through two contracts one whereby the institution purchases gold from the client in return for a specific sum, and another whereby the gold is sold back to the client on instalments over a defined period. The client receives the gold after two weeks, similar in outcome to previous practices, but through different procedures and documentation.

According to the information, several conditions govern the buying and selling process, resembling those previously in place. If a client fails to pay two instalments, all remaining instalments become immediately due. The operations of “Joud” are managed in consultation with legal experts to avoid any legal irregularities.

On the surface, Al-Qard Al-Hassan’s services will no longer remain as they were once the institution transitions to “Joud.” Gold pledging and ATM services will be discontinued, while operations will continue under the framework of the law, with official invoices subject to taxes and fees, leaving the state with no justification to comply with external demands. However, even if the Lebanese state accepts this step—which may appear as the closure of one institution and its replacement with a legal alternative the question remains whether the United States, which has insisted on shutting down and restricting Hezbollah’s financial capabilities, would accept such a move.

According to a legal source opposed to Hezbollah’s measures, what the group is doing amounts, in practice, to replacing the sign bearing the name “Al-Qard Al-Hassan” with another bearing a different name, nothing more. Acceptance of such a step by the Lebanese state, the source argues, would deepen the rift with the international community and be viewed as circumvention, manipulation, and a sign of Lebanese weakness in dealing with Hezbollah. Asked about a solution for an institution linked to hundreds of thousands of people, the source said that clients’ liabilities must be settled first, followed by closure no alternative.

This step is part of a broader transformation plan aimed at confronting both external and domestic pressure to close the institution. Lebanese sources following international demands say this shift reflects the failure of all attempts to save Al-Qard Al-Hassan through talks between Hezbollah and Lebanese authorities. They add that the party has become convinced it must fragment the services provided by the institution in order to preserve some of them if it ultimately complies with demands for full closure.

According to its website, the association says its aim is to help people by granting time-bound loans to address certain social problems, while promoting cooperation, solidarity, and mutual support within society. Sources add that, following the fragmentation of services, gold pledging has been transferred to the commercial institution, enabling operations to continue under the law. This follows the suspension of other services, including ATM services, and sends a message to Lebanese authorities that remaining activities are conducted legally, through official invoices, and subject to taxes and commercial transaction regulations.

However, the same sources note that official financial declarations in this model concern customers rather than depositors or sources of funds, which complicates the prospect of international acceptance. They point out that three previous proposals to regularize Al-Qard Al-Hassan were rejected by the United States: first, turning it into a mutual aid association; second, licensing it as a financial company—also rejected by Banque du Liban; and third, transforming it into a financial cooperative offering loans similar to existing cooperatives in Lebanon and abroad, subject to Lebanese law and declaring its clients. All proposals were categorically rejected.

This aligns with assessments by Lebanese financial circles, which rule out the possibility that any transformation would gain U.S. approval. A prominent Lebanese financial source said it is unlikely that this repositioning would be accepted by the U.S. Treasury, which scrutinizes Lebanon’s financial details closely. He noted that Lebanon is under strict Treasury oversight due to the massive expansion of the cash economy, and that such measures fall within cash-based economic activity outside the banking sector.

The source added that changing the form will not satisfy U.S. demands, as long as the substance remains. From Washington’s perspective, Al-Qard Al-Hassan would still exist and continue providing services, albeit under a different structure. Legally, under Lebanese law (excluding Banque du Liban regulations), a commercial company may engage in buying and selling, including instalment sales, but this does not resolve the core issue of U.S. rejection. The funds would remain outside the banking sector and, in the current political climate, would continue to be viewed with suspicion.

It appears that Hezbollah has made clear to concerned parties that it is not prepared to make further concessions and will not allow harm to its support base, which relies on and benefits from these services. The party intends to defend this matter in the same way it defends its weapons; in the view of Hezbollah’s leadership, both are subject to attempts to tighten the noose until surrender something they say will never happen.

According to the information, Hezbollah’s Secretary-General, Sheikh Naim Qassem, is personally overseeing this file and has instructed the party’s leadership to treat it as a top priority, on par with the weapons issue, while managing it in a way that avoids confrontation with the state and preserves the services and social foundations of the institution. Accordingly, Hezbollah is attempting, through legal means, to preserve its financial arm by changing its name. The key question, however, is not how the Lebanese state will respond, but how the United States will react if Hezbollah completes this new step.