PERU SEES 370% RISE IN EXTORTION CASES AS LOAN SHARKING EPIDEMIC SPREADS

Financial Desperation Fuels Extortion Crisis in Peru

Lima, PERU - A sharp increase in extortion cases has been reported in Peru, with a staggering 370% rise between 2021 and 2023. The country’s Attorney General’s Office has seen a significant surge in cases of loan sharking and other forms of extortion, affecting all but two of its 34 fiscal districts.

Key Statistics

• 370% increase in reported extortion cases between 2021 and 2023
• Six times as many reports of “gota a gota” loans made to the Interior Ministry’s complaints platform than all other forms of extortion combined in 2023
• Over 500,000 people in Peru owe “gota a gota” loans
• Almost half of Venezuelans in Peru are unbanked, while only 5% have been able to receive credit from formal financial institutions

The Rise of “Gota a Gota” Loans

The “gota a gota” or “drop by drop” loans have been particularly problematic. These loans accounted for six times as many reports made to the Interior Ministry’s complaints platform as all other forms of extortion combined in 2023. Police investigations reveal that this practice originated in Colombia and first appeared in Peru’s northern regions before spreading to Lima and later to southern cities.

How It Works

• Borrowers are forced to pay exorbitant interest rates
• Loans are often taken out to pay other debts
• Vulnerable communities, including Venezuelan migrants, are particularly targeted

The Role of Organized Crime

The Attorney General’s Office has acknowledged that organized crime is behind much of the extortion activity in Peru. Foreign gangs, particularly those from Venezuela, have entered the market, seeking alliances with existing groups and aiming to take control.

Experts’ Warning

Unless urgent action is taken to address financial desperation and restrict access to credit for organized crime groups, experts warn that the situation will continue to deteriorate.