Three cases in recent weeks highlight how Colombian groups continue to dominate gota-a-gota loansharking schemes across Central and South America, thanks to a mixture of experience, access to financing, and drug trafficking connections.
Anti-crime operations in Peru, Panama, and El Salvador in July have taken down loansharking operations with Colombian ties.
The largest bust took place in El Salvador. Authorities there announced on July 17 that they had dismantled a large-scale loansharking ring, allegedly made up of 110 Colombian nationals, including former military and police officials.
They had reportedly entered El Salvador as tourists to launder drug trafficking profits through a loan scheme known as gota-a-gota (drop by drop).
“We’re facing an emerging criminal structure in our country,” El Salvador’s Justice Minister Gustavo Villatoro said in a statement.
Gota-a-gota is a commonly used term for illegal lending or loansharking in which the lenders — predominantly armed groups linked to drug trafficking — give short-term loans with interest rates of at least 20% daily.
Their borrowers are usually people in dire need of funds as they are shut out of the legal credit market. Repayment is guaranteed through violence.
The practice gained prominence in Medellin, Colombia at the height of the cocaine boom in the 1990s, as a way for criminal groups to invest and launder vast profits from drug trafficking. Since then, gota-a-gota has spread to nearly every part of Latin America and the Caribbean.
Colombians do not have a complete monopoly on loansharking in Latin America, which also goes by names such as préstadiario (daily lending), préstamos informales (informal lending), or chulco in Ecuador.
But the practice has become so closely associated with Colombians that the term prestamistas colombianos, or Colombian lenders, has started to appear in news media around the region as a synonym for loan sharks.
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Colombian groups’ deep pockets and extensive experience give them an advantage over local loan sharks in other countries in the region.
Loansharking is a sophisticated criminal activity that requires skilled operators who can find clients and establish collection routes, ensure debtors don’t run off with the borrowed money, and pressure family members and friends to pay their debt if they do.
“Not just anyone can collect,” said Carlos Andrés Zapata Cardona, president of El Instituto Popular de Capacitación (IPC), a Colombian thinktank that studies criminal policy and human rights.
“It’s not just a matter of showing up with a weapon and intimidating someone. Collection has essence and style, and there’s also a science to the process. It’s not that simple and the Colombians, they specialize in it.”
“In Colombia, there are basically schools for this criminal economy,” said Hugo Mario Cárdenas López, an editor at Colombian newspaper El País who has covered the regional spread of gota-a-gota.
Cocaine profits give transnational drug trafficking organizations a big bank to lend from and technological advancements have made cross-border financial transactions easy.
The groups most involved in gota-a-gota are some of Colombia’s most enduring drug trafficking organizations, such as the Oficina de Envigado and the Gaitanist Self-Defense Forces of Colombia (Autodefensas Gaitanistas de Colombia – AGC).
“The capital is Colombian, and the networks are the same ones involved in smuggling drugs,” Zapata Cardona said.
Colombians also collaborate with other armed actors to mount gota-a-gota operations on their territory, doing the dirty work that tends to alienate local communities.
In Mexico, Colombian groups have paid local groups, including the Unión de Tepito, the Zetas, and the Jalisco Cartel New Generation (Cartel Jalisco Nueva Generación – CJNG) a cut of their profit for the right to operate.