HomeNewsBriefColombian Loan Sharks Expanding Internationally
BRIEF

Colombian Loan Sharks Expanding Internationally

COLOMBIA / 1 SEP 2015 BY ARRON DAUGHERTY EN

Multiple reports throughout Latin America indicate that Colombian loan sharks are allegedly expanding their operations throughout the region. 

Over the last few years, multiple groups of Colombian nationals have been arrested for usury-related crimes in countries ranging from Brazil to Honduras to Argentina. 

An unnamed Colombian police intelligence official told El Tiempo that authorities have also identified Colombian loan shark groups operating in Peru and Chile. These groups have links to other Colombian criminal organizations such as the Oficina de Envigado and the Urabeños, the report said. 

These groups operate by offering credit to poor and working-class people who lack access to formal banking services. However, the loan sharks often charge abusively high interest rates in a practice known as “gota a gota” or “drop by drop,” named after the way in which victims are slowly bled dry of funds. 

When debtors can no longer pay, loan sharks may begin taking possessions and property as payment or resort to violence, according to reports. 

“Gota a gota” was a practice frequently seen in Medellin, Colombia during the 1980s, an alleged loan shark known only as “Mario the Colombian” told Argentine newspaper Clarin.

“At the time, there was an overflow of drug trafficking money, and someone thought it should be used for loans,” he added.

According to Mario and other reports, usury lending in Colombia and abroad is often linked to other illicit activities. Groups may use it to fund other criminal schemes or to launder dirty money.

InSight Crime Analysis

While some governments have occasionally sought to scapegoat Colombians for crime or other social ills, these reports of Colombian loan sharks expanding their operations abroad are plausible for several reasons. 

SEE ALSO:  Colombia News and Profiles

First, usuary lending is a relatively cheap business to set up. The initial amount of money need to finance small loans is inexpensive, compared to setting up drug labs or establishing elaborate smuggling routes. 

Secondly, loan sharks can establish themselves in new countries by piggybacking on other criminal enterprises. Many of the same nations which caught Colombian loan sharks have also recently captured Colombians involved in the drug trade.

Third, while financial development varies widely from country to country, a reported 65 percent of Latin Americans still lack access to formal banking. Despite their abusive practices, Colombian loan sharks are filling a high-demand financial niche. 

Fortunately, Latin America has also seen explosive growth in the number of legitimate micro-lenders. Facilitated by cheap new technology like mobile banking through cellular phones, these lenders are increasingly moving into sectors serviced by loan sharks. If this continues, it is possible that loan sharks may soon be priced out of their once lucrative market. 

Compartir icon icon icon

What are your thoughts? Click here to send InSight Crime your comments.

We encourage readers to copy and distribute our work for non-commercial purposes, with attribution to InSight Crime in the byline and links to the original at both the top and bottom of the article. Check the Creative Commons website for more details of how to share our work, and please send us an email if you use an article.

Related Content

COLOMBIA / 25 MAY 2018

Seuxis Paucis Hernández Solarte, alias “Jesús Santrich,” is the name on everyone’s lips, the cornerstone of Colombia’s rocky peace process.

COLOMBIA / 12 NOV 2010

Nicolás Rodríguez Bautista, alias Gabino, the top leader of the National Liberation Army reappeared to call for a Constitutional Assembly…

COLOMBIA / 13 NOV 2018

Recent ELN attacks against the Venezuela military in the state of Amazonas and civilian miners in the state of Bolívar…

About InSight Crime

THE ORGANIZATION

We Have Updated Our Website

4 FEB 2021

Welcome to our new home page. We have revamped the site to create a better display and reader experience.

THE ORGANIZATION

InSight Crime Events – Border Crime: The Northern Triangle and Tri-Border Area

ARGENTINA / 25 JAN 2021

Through several rounds of extensive field investigations, our researchers have analyzed and mapped out the main illicit economies and criminal groups present in 39 border departments spread across the six countries of study – the Northern Triangle trio of Guatemala, Honduras, and El…

BRIEF

InSight Crime’s ‘Memo Fantasma’ Investigation Wins Simón Bolívar National Journalism Prize

COLOMBIA / 20 NOV 2020

The staff at InSight Crime was awarded the prestigious Simón Bolívar national journalism prize in Colombia for its two-year investigation into the drug trafficker known as “Memo Fantasma,” which was…

ANALYSIS

InSight Crime – From Uncovering Organized Crime to Finding What Works

COLOMBIA / 12 NOV 2020

This project began 10 years ago as an effort to address a problem: the lack of daily coverage, investigative stories and analysis of organized crime in the Americas. …

ANALYSIS

InSight Crime – Ten Years of Investigating Organized Crime in the Americas

FEATURED / 2 NOV 2020

In early 2009, Steven Dudley was in Medellín, Colombia. His assignment: speak to a jailed paramilitary leader in the Itagui prison, just south of the city. Following his interview inside…