The Al-Qard al-Hasan Association, referred to as Hezbollah’s financial arm, has announced a suspension of compensation payments intended for displaced persons and the partial restoration of homes damaged during the recent conflict. The suspension will remain in effect until February 10, 2025, local media reported on Wednesday.

The association attributed the delay to "technical reasons," but assured that other financial operations, including loan disbursements, withdrawals, and deposits, would continue without interruption.

The decision to halt compensation has raised concerns about Hezbollah’s financial health, with many attributing the move to the significant losses the group suffered during the recent war with Israel. Asharq Al-Awsat cited sources as saying that Israeli airstrikes destroyed most of Al-Qard al-Hasan's branches, headquarters, and safes, along with their contents, including cash and jewelry. This destruction has left Hezbollah facing a severe financial deficit, complicating its ability to meet its compensation commitments—an issue it did not face during the 2006 conflict.

Sources familiar with the internal workings of Hezbollah noted that the group had pledged to provide accommodation and basic restoration support to displaced families for a full year until reconstruction funds could be secured. However, the scale of the destruction and the number of families affected by the conflict exceeded Hezbollah's expectations, prompting the group to suspend compensation until further funds could be mobilized.

Shortly after the ceasefire was implemented, Hezbollah announced that the Al-Qard al-Hasan Association would grant $14,000 annually to each displaced family. Of this, $8,000 was allocated for furniture replacement to be paid as a one-time lump sum, $6,000 for housing rent for those in Beirut and its suburbs, and $4,000 for rent in the south, Bekaa, and other regions.

The sources added that Iran had initially provided Hezbollah with a $1 billion sum in the early days following the ceasefire, but this amount has already been exhausted. With liquidity running dry, Hezbollah is now reportedly searching for new sources of funding to continue its operations.

The announcement from Al-Qard al-Hasan about the suspension of compensation payments has drawn attention due to its contradiction with the foundation’s decision to continue other financial activities. While claiming the halt was due to "technical reasons," the foundation has assured that loans, withdrawals, and deposits will remain unaffected. This discrepancy has raised concerns that Hezbollah may resort to tapping into public deposits to fund compensation, which could see individuals' loans effectively being used to cover the costs of the scheme.

In addition, sources noted that Hezbollah is relying on supply routes from Iran, which have become increasingly critical in light of developments in Syria and tighter controls by Lebanese authorities at Beirut-Rafic Hariri International Airport and the port of Beirut. These measures have effectively halted the smuggling of uninspected goods to Hezbollah, which previously used these methods to circumvent international sanctions.

Complaints have also emerged from homeowners affected by the conflict, who argue that compensation assessments are not equitable. They contend that higher payments are being given to selected individuals, with some compensation assessments covering only structural damage to homes—such as broken glass and cracked walls—while the value of furniture, which often exceeds the cost of home repairs, is being overlooked.

A financial expert told Asharq Al-Awsat that the suspension of payments cannot solely be attributed to "technical reasons," as claimed by the association. There are several internal and external factors at play, including logistical challenges in transferring funds from Iran to Lebanon, particularly after the closure of vital routes in Syria and the heightened monitoring of Iranian flights.

The expert further explained that there is also a legal obstacle for individuals receiving compensation from Al-Qard al-Hasan. These recipients are concerned about the potential risk of being added to the U.S. sanctions list. In light of this, Hezbollah is reportedly prioritizing the payment of salaries to its fighters, as well as to the families of martyrs and wounded veterans, further straining the group's financial resources.

As Hezbollah grapples with financial challenges, its ability to sustain its commitments to the displaced and rebuild the damaged infrastructure remains uncertain. The situation highlights the broader financial struggles of the group, as it faces mounting internal and external pressures while attempting to manage the aftermath of a prolonged conflict.