In Peru, widespread financial vulnerability is causing an increase in predatory crime, resulting in a sharp rise in cases of loan sharking and extortion.
Between 2021 and 2023, the number of extortion cases in Peru increased by 370%, from 4,761 to 22,396, and overall crime reports went up by 20% during the same period, according to the Attorney General’s Office. Almost all of Peru’s 34 fiscal districts saw extortion reports surge by at least 150% during that time, and this trend is continuing into 2024. according Loan sharks demanding extortionate interest rates are driving the surge, particularly using “drop by drop” loans. These loans generated six times as many reports to the Interior Ministry’s complaints as all other forms of extortion combined in 2023.
Predatory gota a gotaThe emergence of gota a gota in Peru dates back to the early 2010s, originating from Colombia, and initially appeared in Chiclayo, Piura, and Trujillo in the north of the country, then passed to Lima and later spread south. By late 2017, it had reached 97 cities. platform Between May and December 2023, half of all gota a gota cases reported nationwide were from the capital, Lima. In a recent example of this growing criminal market, police in Lima apprehended a Venezuelan-Colombian gota a gota group with 20 members on March 16, and also confiscated guns and explosives from the group.
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Financial Desperation Leading to Victimization seen According to La Federación Peruana de Cajas Municipales de Ahorro y Crédit, around 500,000 people in Peru are in debt from gota a gota loans. Borrowers typically seek out these loans to pay off other debts, as per Peru’s Interior Ministry.
The 1.2 million Venezuelan migrants in Peru are particularly susceptible to exploitation by loan sharks due to their lack of residency status and majority employment in the informal job market, severely limiting their access to formal financial institutions. dismantled About half of the Venezuelans in Peru were unbanked as of September 2022, and only 5% have been able to obtain credit from formal financial institutions. In Lima, only 3% have accessed credit from a bank, according to a November 2023 USAID report.
Peruvians are also experiencing a need for loans as the country has struggled to recover from the COVID-19 pandemic. The Videnza Instituto, a non-governmental organization specializing in political policy, predicts that poverty reached its highest level since 2010 in 2023.
A cap on interest rates of business and consumer loans approved by Congress in May 2021 has worsened the situation by making banks less likely to grant loans, leading desperate individuals into the hands of extortionists. FEPCMAC Foreign Competition Aggravating the Situation
While Colombians have historically dominated the gota a gota loan market in much of Peru, they and Peruvian groups are facing competition from newly arrived Venezuelan gangs. Some Venezuelan gangs may seek alliances with existing groups in a bid to eventually take control, according to Abraham Valle from the organized crime consulting agency Consultora Nacional de Criminologia as told to InSight Crime.
“They have had to adjust due to moving from Venezuela,” he stated. “[They believe] I won’t compete with someone who already controls the market or I will conflict with this gang. Instead, I can negotiate with them, and maybe eventually, when I have enough members, I can take control of that market.” studyTren de Aragua study found.
, a Venezuelan mega-gang operating across borders, has achieved that status in at least one area of the country, as per Dr. Jorge Chávez, National Coordinator of the Attorney General Office’s organized crime division. In Arequipa, a region in southern Peru, the “Tren de Aragua has forcibly taken [gota a gota] away at gunpoint,” he told InSight Crime.Given that Tren de Aragua has flourished in Peru by
A cap members of the Venezuelan diaspora, the presence of over a million Venezuelans without access to credit works to the advantage of the group.
“These criminal organizations come and exploit these vulnerable Venezuelans who have come here looking for new opportunities,” Chávez said.
Featured image: In Peru, a passer-by reads an advertisement for a loan. Credit: Interior Ministry of Peru
Financial vulnerability is leading to a significant rise in reports of people in Peru resorting to “gota a gota” loans.
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“Migrating from Venezuela has caused them to adapt,” he said. “[They think] I’m not going to compete with someone who already has the market or I will clash with this gang. Instead, I can make a deal with them, and maybe at some point, when I have enough members, I can take over that market.”
Tren de Aragua, a transnational Venezuelan mega-gang, has reached that point in at least one part of the country, according to Dr. Jorge Chávez, National Coordinator of the Attorney General Office’s organized crime division.
In Arequipa, a region in southern Peru, the “Tren de Aragua has taken [gota a gota] away at gunpoint,” he told InSight Crime.
Given that Tren de Aragua has thrived in Peru by exploiting members of the Venezuelan diaspora, the presence of over a million Venezuelans without access to credit plays into the group’s hands.
“These mafias come and they take advantage of these very Venezuelans who have come here seeking new horizons,” Chávez said.
Featured image: In Peru, a passer-by reads an advertisement for a loan. Credit: Interior Ministry of Peru