Al-Qard al-Hassan, bombed by Israel over it's Hezbollah links, is a lifeline for mainly Muslim Shiite communities battling a years-long financial crisis that has locked Lebanese out of their bank deposits.
The financial firm, officially registered as a charity, has been offering customers credit in exchange for gold deposits on an interest-free basis since the 1980s.
Its beneficiaries are mainly Shiite Muslims, but in a country where a five-year economic crisis has forced many into desperation, Christians and Sunni Muslims have also turned to its services.
The United States has sanctioned the association, accusing Hezbollah of using it as a cover to mask its financial activities and gain access to the international financial system.
On Sunday evening, Israel struck Al-Qard al-Hassan branches in Beirut, the eastern Bekaa Valley and south Lebanon, official media said.
Israel accuses Al-Qard al-Hassan of financing "Hezbollah's terrorist operations".
Al-Qard al-Hassan says it has more than 30 branches nationwide, mainly in Hezbollah bastions including Beirut's southern suburbs, but also in central Beirut and in other major cities such as Sidon and Tyre.
It provides micro-credits to small businesses, workers and medium-sized agricultural or industrial enterprises.
In recent years it has broadened its activities, even offering loans for solar panels, in a country plagued by long power cuts.
In 2020 and 2021, while the economic crash prevented Lebanese banks from providing loans, Al-Qard al-Hassan said it had granted 212,000 loans worth $553 million "despite the crisis".
The economic crash boosted the group's allure beyond the Shiite community, because it allowed depositors to preserve their savings in gold.
Al-Qard al-Hassan says its loans are available "to all Lebanese", with some Christians and Sunnis also telling AFP they were clients.
"You deposit gold, and they give you its worth in cash. You can then repay (this loan) without interest," a customer told AFP, speaking on condition of anonymity out of security concerns.
For Hezbollah scholar Amal Saad, Israel's attacks on the financial institution aimed to shake the group's support base.
"These strikes don't actually target Hezbollah's finances or Iran's funding, but the economic lifeline of over 300,000 Lebanese who not only deposit their savings with the non-profit NGO but also rely on it for interest-free loans," Saad said on X.
"While Iran helped establish the organisation in the 1980s, it is now entirely self-funded, overwhelmingly by Lebanon's Shia (Shiite) community" that represents 85 percent of its client base, she said.
A senior Israeli intelligence official, briefing journalists on condition of anonymity, also said the strikes were meant "to affect the trust between Hezbollah and a lot of the Shiite community that uses this system".
Saad added that Israel's targeting of Al-Qard al-Hassan is "part of its strategy to further immiserate an already vulnerable, displaced population," she told AFP, referring to the attacks as "collective punishment" of Lebanese Shiites.
"It's also an expression of Israel's bankruptcy -- it has failed to make any meaningful incursions into South Lebanon... It's resorting to targeting civilian institutions which are of no value militarily," she added.
Israel on September 30 began what it called "targeted" raids against Hezbollah in southern Lebanon, a week after it escalated air strikes.
Hezbollah critics say Al-Qard al-Hassan evaded regulations that apply to the banking sector, since it is officially registered with authorities as a charity.
Al-Qard al-Hassan has been caught up in decades-long tensions between Hezbollah's Iranian patron and Washington.
In 2007, the US Treasury froze the institution's assets, and in 2021 imposed new sanctions against several figures linked to it.
Al-Qard al-Hassan, "masquerades as a non-governmental organization (NGO) under the cover of a Ministry of Interior-granted NGO license, providing services characteristic of a bank in support of Hezbollah while evading proper licensing and regulatory supervision", the US Treasury said.
The department has also accused the group of "hoarding hard currency" to build Hezbollah's "support base".
While it claims "to serve the Lebanese people, in practice it illicitly moves funds through shell accounts and facilitators, exposing Lebanese financial institutions to possible sanctions," Treasury added.
