Illegal loans and extortion: the gears of organised crime in Ecuador
A report by OECO and PADF reveals that informal lending has been integrated into organised crime in Ecuador. Extortion increased by 898% between 2019 and 2025.
Informal lending becomes a tool of organised crime in Ecuador
According to infobae.com, a joint report by the Ecuadorian Observatory of Organised Crime (OECO) and the Panamerican Foundation for Development (PADF) concludes that "chulco" or "gota a gota" — informal loans with illegal interest rates — is no longer an isolated property crime in Ecuador. Usury, illegal money-raising and extortion now function as interconnected links within the value chains of organised crime.
The study, produced as part of the Crime-Lab project, identifies a dual function of these schemes for criminal structures: they generate returns through capital reinvestment and facilitate the legalisation of massive cash flows. The cases analysed point to links with drug trafficking, illegal migrant smuggling and money laundering.
Extortion: from 1,616 to 16,130 reports in six years
The most striking figure in the report concerns extortion. In 2019, the Office of the Prosecutor General registered 1,616 incident reports for that crime. In 2025, the figure reached 16,130, representing an increase of 898% and a rate of 89 reports per 100,000 inhabitants.
Guayas province accounts for 35% of cases, followed by Pichincha (13%), El Oro (10%), Esmeraldas (7%) and Manabí (6%). For the OECO, extortion emerges as a distortion of the collection phase of illegal loans.
"Usury has not gone away; the difference is that now there is extortion and murder as part of it," said one of the people interviewed for the study. Another testimony contained in the report describes the change in collection methods: "People no longer dare to report it because they will be killed; before they were going to take their belongings, now they kill them directly."
Cycle of re-victimisation and territorial control
The report also identifies a cycle of re-victimisation. Merchants who pay "protection money" to criminal groups resort to illegal loans to meet extortion demands and become trapped in a double network of debt and threats.
In cantons such as Latacunga, atypical growth in extortion coincides with a reduction in reports of usury. The report authors interpret this phenomenon as a transition from informal loan collection towards direct territorial control.
Usury, for its part, is concentrated in the central highlands. Between 2019 and 2025 the Prosecutor's Office registered 1,933 incidents, an average of almost one per day. Tungurahua accounted for 29.2% of cases in 2025 and Ambato leads the rate among cantons of more than 100,000 inhabitants. In illegal money-raising, Pichincha concentrates 57% of reports.
The Huaquilles case: migrants, cash and seven years in prison
One of the cases analysed in the report illustrates the overlap of these markets. In March 2024, during a police check in Huaquilles — on the border with Peru — agents found USD 49,980 in cash distributed across seven bags labelled with names and amounts. The investigation determined that the money came from migrant smuggling to the United States and loans with monthly interest rates of 20%. The three defendants were sentenced to seven years in prison, but only for money laundering; usury and migrant smuggling were mentioned only as reference to the origin of the money.
Insufficient judicial response
That limited response is the norm. Between 2021 and 2025, 157 criminal cases were initiated for usury against nearly 1,400 incident reports registered. Press reports cited in the report indicate that between 2017 and 2022 only 8 of 756 cases of illegal money-raising concluded in conviction.
The main victims are people excluded from the formal financial system, with informal employment and unstable incomes who need immediate liquidity. A 2021 study cited by the OECO found that those accessing these loans believed they were paying interest of between 10% and 20% monthly; in reality, they pay on average around 100% monthly. The report warns that by becoming the main providers of money in a community, criminal organisations also secure social and territorial control over it.
Source: Google News EC — Crime