Hezbollah’s financial network in Lebanon is showing signs of growing strain, with the remaining branches of the group-linked Al-Qard Al-Hasan Association reportedly imposing tighter conditions on dollar-denominated loans and limiting the types of gold accepted as collateral.

The reported measures come as the United States steps up pressure on Hezbollah’s financial infrastructure. Washington on August 20 imposed new sanctions targeting Hezbollah and individuals accused of facilitating cash-smuggling networks, while reaffirming its view that the group operates under the command of Iran’s Islamic Revolutionary Guard Corps-Quds Force. 

In February, the U.S. Treasury also sanctioned Jood SARL, a gold exchange company that it said operated under the supervision of Al-Qard Al-Hasan and converted Hezbollah's gold reserves into funds used to support the group's activities. 

Lebanese sources cited by Erem News said the latest restrictions reflected an acute shortage of hard currency within Hezbollah's parallel financial system. Under the reported new arrangements, borrowers seeking dollars must provide more specific forms of gold collateral, including standardized gold coins and bullion, while conventional jewelry is no longer accepted.

The shift would mark a significant change for an institution that has long relied on gold-backed lending. Al-Qard Al-Hasan has provided interest-free loans, many of them secured by gold or jewelry, and expanded its role as Lebanon's formal banking system collapsed after 2019.

From social lending to financial survival

The Lebanese sources described the new restrictions as part of an emergency strategy aimed at preserving scarce dollar liquidity for Hezbollah's most pressing obligations.

For decades, Al-Qard Al-Hasan has been an important financial institution within Hezbollah's support base, operating outside Lebanon's conventional banking system. Its importance grew after the country's banking collapse, when many Lebanese lost access to their deposits and turned to alternative sources of credit. 

The latest restrictions, according to the sources, suggest that the group is now being forced to prioritize its remaining cash reserves, particularly to meet the enormous costs of supporting people displaced from southern Lebanon and Beirut's southern suburbs and families whose homes were destroyed during successive conflicts.

Those responsibilities require large amounts of immediately available cash to pay for accommodation, basic necessities and emergency assistance, placing additional pressure on an already constrained financial network.

Why standardized gold matters

The reported decision to stop accepting ordinary jewelry as collateral is significant because it changes the nature of the gold held by the institution.

Lebanese sources familiar with the parallel market said standardized coins and bullion are easier to transport, conceal and store than finished jewelry. Large amounts of value can be kept in relatively small containers and moved quickly if security conditions deteriorate.

Standardized gold also avoids some of the losses associated with jewelry. Finished pieces include workmanship and other costs that can reduce their resale value, while bullion and recognized gold coins can be valued more easily and converted into cash in regional markets.

The sources said the new policy therefore serves two purposes: preserving the value of Hezbollah's gold holdings and making those assets easier to mobilize in an emergency.

The measures also appear designed to reduce ordinary demand for dollar loans and preserve scarce hard currency for what Hezbollah considers priority expenditures.

In effect, the sources described Al-Qard Al-Hasan as increasingly resembling a small reserve institution for Hezbollah's leadership, holding onto dollars that can be deployed for social assistance, displacement and reconstruction rather than lending them broadly to individual borrowers.

Three pressures on Hezbollah's finances

Lebanese sources said the decline in dollar liquidity was the result of several pressures converging at the same time.

One has been repeated attacks on Hezbollah's financial infrastructure, including Al-Qard Al-Hasan branches and facilities used to store and manage cash and gold. Such attacks have disrupted the physical network through which the group manages its financial resources and created additional challenges in transporting and safeguarding cash.

The second is the tightening international sanctions regime.

The third is the cost of Hezbollah's social obligations.

The group has had to devote substantial resources to housing and supporting displaced members of its constituency following successive wars. That has increased the demand for immediately available dollars at precisely the time its traditional sources of foreign currency are coming under greater scrutiny.

A growing squeeze on borrowers

Economic researcher Khaled Abu Shakra has previously argued that Hezbollah's efforts to adapt its financial mechanisms to international sanctions are facing increasingly sophisticated monitoring.

He has described the use of standardized gold assets as collateral as a sign of a broader shift from conventional community lending toward strategic financial protection in a conflict environment.

Political analyst Michel Abu Najm, meanwhile, said the latest restrictions at Al-Qard Al-Hasan indicated a structural liquidity problem.

He argued that when a parallel financial institution becomes increasingly dependent on the sale or liquidation of gold assets to generate immediate dollars, it is evidence that external hard-currency inflows have weakened.

The impact is likely to be felt by the borrowers who have relied on Al-Qard Al-Hasan for medical expenses, education, housing and other basic needs.

Gold has also become an important store of wealth for Lebanese households after the collapse of the banking system in 2019. 

Abu Najm said borrowers who possess gold jewelry rather than standardized coins or bullion could now find themselves unable to access loans they previously relied on. Families may be forced to surrender valuable gold coins for relatively small amounts of cash or cope with rising living costs without access to credit.

That could generate growing frustration among Hezbollah's traditional support base, particularly at a time when the Lebanese state remains unable to provide many of the social services that Al-Qard Al-Hasan and other Hezbollah-linked institutions have traditionally supplied.