Financial Crime World

Financial Crime on the Rise in Peru: Loan Sharks and Extortion Soar Amid Desperation

Economic Struggles Fuel Financial Vulnerability

Peru has become a hotspot for financial crime, with cases of extortion skyrocketing by 370% between 2021 and 2023. The country’s economic struggles have led to widespread vulnerability, driving individuals into the hands of loan sharks and extortionists.

Prevalent Forms of Extortion

  • Predatory “Gota a Gota” Loans: Borrowers are charged exorbitant interest rates, with these loans accounting for six times as many reports made to the Interior Ministry’s complaints platform as all other forms of extortion combined in 2023.
  • Traditional Colombian Gangs: Colombian gangs have traditionally controlled gota a gota loans in much of Peru, but Venezuelan gangs are increasingly entering the market.

Vulnerable Population: Venezuelan Migrants

  • Over 1.2 million Venezuelans live in Peru, with many lacking residency status and working in the informal job market.
  • A World Bank Group study found that almost half of Venezuelans living in Peru were unbanked in September 2022.

Exacerbating Factors

  • Interest Rate Cap: The cap on interest rates imposed by Congress in May 2021 has limited the ability of banks to grant loans, driving desperate individuals into the hands of loan sharks and extortionists.
  • Transnational Gangs: Colombian and Venezuelan gangs are taking control of the gota a gota market by force, with some seeking alliances with existing gangs.

Expert Insights

  • Dr. Jorge Chávez, National Coordinator of the Attorney General Office’s organized crime division: “These mafias come and they take advantage of these very Venezuelans who have come here seeking new horizons.”
  • Abraham Valle from the organized crime consulting agency Consultora Nacional de Criminologia: “Venezuelan groups may seek alliances with existing gangs with an eye on eventually taking control.”

Call to Action

The situation in Peru highlights the need for a comprehensive approach to address financial vulnerability and prevent further exploitation by loan sharks and extortionists.