The link between financial vulnerability and predatory crime in Peru

In Peru, widespread financial vulnerability has led to a rise in criminal competition, with an increase in cases of loan sharking and extortion. Cases of extortion in the country have surged by 370% between 2021 and 2023, with almost all fiscal districts reporting a significant rise. This trend is continuing into 2024, driven by predatory gota a gota loans, where loan sharks demand high-interest rates from borrowers. Reports of gota a gota loans first appeared in the early 2010s in Peru, initially coming from Colombia, and have since spread to various cities across the country.

The rise in gota a gota cases has been particularly prevalent in Lima, where half of all reported cases occurred between May and December 2023. Recently, a Venezuelan-Colombian gota a gota group with 20 members was dismantled by the police in Lima, with weapons and explosives seized from the group. Financial desperation is leading many individuals in Peru, including around 500,000 people, to seek out gota a gota loans to pay off other debts. Vulnerable populations, such as the 1.2 million Venezuelan migrants in Peru, are especially targeted by loan sharks due to their limited access to formal financial institutions.

The COVID-19 pandemic has worsened the economic situation in Peru, with poverty levels reaching their highest point since 2010. A cap on interest rates for loans approved in 2021 has made it harder for individuals to secure loans from traditional financial institutions, pushing them towards extortionists. Furthermore, the presence of both Colombian and Venezuelan groups competing for control over the gota a gota market has created additional challenges in the country. Some Venezuelan gangs, like Tren de Aragua, have been able to assert dominance in certain regions by exploiting vulnerable populations, including the large number of Venezuelans without access to formal credit.

The influx of Venezuelan gangs in Peru has introduced new dynamics to the criminal landscape, with these groups seeking alliances with existing networks to gain control. Migrating from Venezuela has forced some gangs to adapt and strategically form partnerships with established groups to eventually take over the market. In regions like Arequipa, the Tren de Aragua has been able to seize control over the gota a gota market through violent means, taking advantage of vulnerable populations seeking financial support. The presence of over a million unbanked Venezuelans in Peru has played into the hands of these criminal groups, who exploit their financial vulnerabilities for profit.

The situation in Peru reflects a complex interplay between financial desperation, criminal competition, and the exploitation of vulnerable populations. As the country grapples with economic challenges exacerbated by the pandemic, individuals are increasingly turning to predatory loans and extortion schemes for financial support. The rise in criminal activity, particularly in the market for gota a gota loans, poses significant risks to the safety and well-being of the population, especially those already facing financial hardship. Addressing these issues will require a multifaceted approach that includes improved access to formal financial services, targeted interventions to support at-risk populations, and coordinated efforts to combat organized crime networks operating in the country.