HomeNewsBriefEcuador Tackles Loan Sharking that Funds Human Smuggling
BRIEF

Ecuador Tackles Loan Sharking that Funds Human Smuggling

ECUADOR / 28 OCT 2013 BY MIRIAM WELLS EN

Ecuador has increased the legal penalties for loan sharks in an attempt to crack down on the exploitation that is a key part of the human smuggling and trafficking chain.

Unscrupulous lenders who charge more than the legal amount of interest will now face jail sentences of five to seven years and fines of up to 200 times the minimum wage ($318 a month), compared to the current punishments of six months to two years in jail and fines between $16 and $311 dollars, reported El Comercio. Those who lend money to five or more people will face even stiffer penalties -- between seven and ten years in jail and fines of up to 500 times the minimum wage.

In one illustrative case, the newspaper spoke to a 67-year-old woman who had borrowed $16,000 from a loan shark to pay for her daughter's passage to the United States in 2008, money that was paid directly to a "coyote" -- criminals who coordinate the transport of illegal immigrants traveling across Latin America towards and over the US border. The woman, who was illiterate, signed documents offering her house as collateral. Despite paying back $1,000 a month the debt -- for which the interest increased by 3 percent each month -- rose to more than $40,000 and her house is now set to be repossessed on December 20.

Between January 2012 and July 2013, 396 cases of usury (lending money with excessive interest rates) were reported across Ecuador, according to figures from the Prosecutor General.

The increased penalties are part of Ecuador's new Penal Code, the majority of which was approved earlier this month.

InSight Crime Analysis

Exorbitant, unethical debt is the bedrock of human smuggling and human trafficking, the key to what makes it such a hugely profitable criminal enterprise. At the beginning of the chain desperate people borrow money to pay excessive transport fees for themselves or relatives. Along the way migrants are often held captive until further amounts are paid, with deadly consequences for those unable to scrape together the cash. Once in the United States, many migrants are then sold into forms of debt bondage such as forced labor or prostitution.

SEE ALSO: Target: Migrants

Effectively cracking down on loan sharks could alleviate some of the distress caused to the families left behind, but given the law will still allow for the borrowing, just at fairer interest rates, it is unlikely to make an impact on the wider net of ruthless exploitation behind human trafficking and smuggling. 

share icon icon icon

Was this content helpful?

We want to sustain Latin America’s largest organized crime database, but in order to do so, we need resources.

DONATE

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.

Was this content helpful?

We want to sustain Latin America’s largest organized crime database, but in order to do so, we need resources.

DONATE

Related Content

ECUADOR / 23 MAY 2011

Ecuador's military carried out a operation to shut down illegal goldmines in the northwest of the country, close to the…

HUMAN SMUGGLING / 21 MAR 2014

US authorities have discovered a home in Texas where human smugglers were keeping over 100 undocumented migrants against their will,…

DRUG POLICY / 22 SEP 2015

Ecuador's authorities say they are shifting their security focus to curbing neighborhood level drug peddling, raising questions about the priorities…

About InSight Crime

THE ORGANIZATION

Apure Investigation Makes Headlines

22 OCT 2021

InSight Crime’s investigation into the battle for the Venezuelan border state of Apure resonated in both Colombian and Venezuelan media. A dozen outlets picked up the report, including Venezuela’s…

THE ORGANIZATION

InSight Crime Tackles Illegal Fishing

15 OCT 2021

In October, InSight Crime and American University’s Center for Latin American and Latino Studies (CLALS) began a year-long project on illegal, unreported, unregulated (IUU) fishing in…

THE ORGANIZATION

InSight Crime Featured in Handbook for Reporting on Organized Crime

8 OCT 2021

In late September, the Global Investigative Journalism Network (GIJN) published an excerpt of its forthcoming guide on reporting organized crime in Indonesia.

THE ORGANIZATION

Probing Organized Crime in Haiti

1 OCT 2021

InSight Crime has made it a priority to investigate organized crime in Haiti, where an impotent state is reeling after the July assassination of President Jovenel Moïse, coupled with an…

THE ORGANIZATION

Emergency First Aid in Hostile Environments

24 SEP 2021

At InSight Crime's annual treat, we ramped up hostile environment and emergency first aid training for our 40-member staff, many of whom conduct on-the-ground investigations in dangerous corners of the region.