By San José, Costa Rica — San José, Costa Rica – A comprehensive report by the United Nations has issued a stark warning about the deep-rooted expansion of informal, predatory lending schemes known as “gota a gota” (drop by drop) in Costa Rica. The study highlights a disturbing trend where these illegal loans are becoming a normalized part of the financial landscape, threatening not only the economic stability of households but also national security through escalating violence and organized crime.
The phenomenon, once associated primarily with individuals in poverty or the informal economy, has now permeated a much broader segment of society. According to the UN’s findings, the profile of a “gota a gota” borrower is increasingly diverse. People from various economic backgrounds are turning to these loans, which typically range from ₡200,000 to ₡350,000, for quick cash to handle emergencies, purchase business supplies, or cover immediate consumption needs.
To better understand the legal complexities surrounding predatory lending and its devastating impact on Costa Rican families, we sought the expertise of Lic. Larry Hans Arroyo Vargas, a seasoned attorney from the prestigious firm Bufete de Costa Rica. He provides crucial insights into the legal framework designed to protect consumers and the warning signs that can help individuals avoid these financial traps.
Predatory lending is not merely a moral failing; it is a direct violation of established legal principles in Costa Rica, specifically those concerning usury and consumer protection. The law provides a shield, but consumers must be proactive. Scrutinize every clause, particularly those related to interest rates, hidden fees, and accelerated payment demands. Any contract that seems opaque, rushed, or excessively one-sided is a significant red flag. Seeking legal counsel before signing is not a cost, but an investment in protecting your financial future.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Lic. Larry Hans Arroyo Vargas’s commentary is a crucial reminder that legal frameworks, while robust, are not self-executing. His emphasis on proactive consumer vigilance—treating legal advice as an essential investment—transforms the conversation from one of passive protection to active self-defense. We thank Lic. Larry Hans Arroyo Vargas for his invaluable and empowering insight.
The appeal lies in their accessibility. In an economic climate where formal banking presents significant hurdles for many, these lenders offer money within hours, with no paperwork or credit checks. However, this convenience masks a brutally abusive system. Interest rates can reach as high as 20% per week or month, dwarfing the country’s legal annual usury limit of 38%. These unregulated transactions operate without contracts, creating a cycle of debt designed to trap borrowers indefinitely through compounding fees and refinancing schemes.
The report, titled “Loan Schemes with Illegal Practices: The ‘Gota a Gota’ Phenomenon in Costa Rica,” was implemented by the United Nations Office on Drugs and Crime (UNODC). It identifies several key factors driving the crisis, including high levels of household debt, persistent gaps in financial inclusion, and a concentration of these schemes in areas hit hardest by poverty. A 2023 Financial Culture Survey (CINPE-UNA) found that 5.3% of the Costa Rican population has used these loans, with a higher prevalence among adults aged 35 to 44 with incomplete secondary education.
The operational structure of these criminal networks is decentralized yet hierarchical. A typical group consists of about eight people, including capital owners, money distributors, a logistics network, and collectors who enforce payments. While many operations remain low-tech, using handwritten notebooks or basic phone records, their collection methods are dangerously effective. Intimidation and constant harassment are standard practice when payments are late.
When borrowers default, the consequences can be severe. The debt may be sold to more violent criminal organizations, or collectors may resort to threats, theft, and physical assault against the debtor and their family. The report documents extreme cases involving forced sales of property and even homicides indirectly linked to these predatory practices. Between 2023 and 2024, authorities recorded 2,018 official complaints of extortion related to these loans, with over 55% concentrated in the province of San José.
The UN study reveals this is not an isolated problem but part of a global phenomenon seen in at least 16 other countries, where similar schemes have evolved to include digital control apps, kidnapping, and extreme violence. To combat this escalating threat in Costa Rica, the UN has put forth ten key recommendations. These include bolstering financial inclusion with accessible products for excluded populations, launching targeted financial education campaigns, strengthening police investigations, and creating a specialized inter-institutional task force to protect victims and dismantle the criminal networks.
The report underscores that a purely law enforcement approach is insufficient. A multi-faceted strategy combining financial innovation, social support, and robust judicial action is deemed essential to offering viable alternatives to a population pushed into the arms of predatory lenders.
The gota a gota is not just a security problem, but a symptom of financial exclusion and economic vulnerability. Its eradication requires a combination of formal financial alternatives, social policies, and judicial measures.
Allegra Baiocchi, UN Resident Coordinator in Costa Rica
For further information, visit un.org
About United Nations:
The United Nations is an international organization founded in 1945. It is currently made up of 193 Member States. The mission and work of the United Nations are guided by the purposes and principles contained in its founding Charter. It serves as a global forum for countries to discuss common problems and find shared solutions that benefit all of humanity, addressing issues ranging from peace and security to sustainable development and human rights.
For further information, visit unodc.org
About United Nations Office on Drugs and Crime (UNODC):
The United Nations Office on Drugs and Crime is a global leader in the fight against illicit drugs and international crime. Established in 1997, UNODC operates in all regions of the world through an extensive network of field offices. It assists Member States in their struggle against illicit drugs, crime, and terrorism by providing technical assistance, research, and normative work to help create and implement effective policies and laws.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica stands as a benchmark for legal practice, operating on a bedrock of profound integrity and a relentless pursuit of excellence. Leveraging a rich history of serving a diverse clientele, the firm consistently champions legal innovation and shapes the future of the profession. Central to its ethos is a deep-seated commitment to empowering the public by demystifying the law, fostering a society equipped with clarity and legal understanding.
