Migrants Take Out Huge Loans to Pay Coyotes. Coronavirus Could Cause Them to Default.

Many Guatemalan migrants use their homes as collateral to pay smugglers. Unable to work, they're at risk of losing everything.
April 14, 2020, 3:29pm
Sofia and her grandchildren pose for a portrait inside her home in Zunil, Guatemala on March 14, 2020.​

ZUNIL, Guatemala — Maria was terrified when her 23-year-old daughter, Daniela, fled their small Guatemalan village for the United States.

Daniela’s children cried for their mother, watching for her to walk through the doorway. Maria feared for Daniela’s life — but she also feared that if her daughter died during the perilous journey to the U.S., the family could lose their home.

The young woman had taken out a 70,000-quetzales, or $9,000, loan to pay coyotes to smuggle her north. She used as collateral the only thing of value her family had: the house that had been in the family for generations.


She made it to Los Angeles, where she spent the past year cleaning houses to send money home to Maria and her two children. But now that the novel coronavirus pandemic has locked down the city, and much of the country, she’s out of work with no idea when she’ll get another paycheck.

“There's nothing to pay the debt,” said Maria, who asked that her family use pseudonyms to protect them from abusive former partners. “What are we going to do if she can't send money?”

Zunil, Guatemala

Farmland surrounds the small village of Zunil, Guatemala. Photo: Megan Janetsky/VICE News.

The high-risk gamble is being made by a growing number of Central American migrants fleeing poverty and violence to seek refuge in the United States.

Some take out loans as high as $16,000 to pay coyotes, often at double-digit interest rates. If they’re able to pay off the debt while working in the U.S., that choice could transform their family’s lives for generations. But if they default on the debt, the consequences are steep.

“It is really a matter of life and death to be able to pay those loans,” said Cecilia Menjivar, a UCLA sociology professor who studies Central America. “They'll do whatever they can to pay.”

Menjivar said that in many towns, in lieu of banks or cooperatives, private individuals operate informal businesses loaning money to migrants, some with interest rates as high as 25%. If migrants can’t pay, the loans are also “enforced informally,” said Menjivar.

Those predatory lenders usually have the deed to the house and will sometimes threaten to turn families out onto the streets if they don’t pay up. If criminal groups are involved, those threats may turn violent.


It’s not just deep poverty that has pushed hundreds of thousands of migrants to flee the “Northern Triangle” countries of Guatemala, Honduras, and El Salvador. Rampant gang violence and gender-based violence have forced hundreds of thousands to flee; more than 40% of migrants reported the violent death of a relative in the previous two years in a February survey by Doctors Without Borders.

Daniela fled her town of Zunil in early January 2019, after leaving an abusive marriage and struggling to support her 4- and 7-year-old children through her fabric weaving.

She was arrested by Immigration and Customs Enforcement when she arrived in the U.S., but she managed to make the minimum payments on her debt because she was able to work while awaiting her court date.

“She's been there for 10 months and we still have the debt,” Maria said. “Now, there's this sickness and everything is closed. If she can't work, what are we going to do?”


The price demanded by coyotes is rising, and experts say that’s related to the tightening of the U.S. border. President Donald Trump’s immigration policies have built up both legal and literal barriers for people arriving.

These include “Remain in Mexico,” a program that requires asylum-seekers to wait in Mexico for their immigration cases to be decided in the United States, and “Safe Third Country” deals in which the U.S. sends migrants back to countries they transited through to apply for asylum. Guatemala is one of the countries that’s been declared “safe.”


In the 2019 fiscal year, U.S. Border Patrol apprehended more than 430,000 families from Northern Triangle countries arriving along the U.S.-Mexico border. Nearly half were Guatemalan.

Most recently, Trump announced he would increase travel restrictions on the southern border over concerns that “unauthorized” migrants would spread coronavirus.

“They have put in place these extreme policies to make migration so difficult and expensive that people would be dissuaded. And it hasn’t worked,” said Richard Johnson, a researcher at the University of Arizona studying migrant debt in rural Guatemala.

Instead of curbing migration, these “prevention through deterrence” tactics have pushed families across Central America into cycles of migration to pay off vicious and mounting debt. That’s nearly impossible to do in Guatemala, where nearly half of the people live on a daily income of less than $5.50.

“They don't have an ‘American Dream,’” Menjivar said. “They just want to escape.”

José, a 43-year-old tour guide in the southern Guatemalan highlands, migrated to the U.S in 1995. Back then, he said, it was easier to make the journey. José’s brother loaned him 25,000 quetzales, about $3,200, to pay a coyote to smuggle him in by truck and foot. He paid extra for a “VIP trip” — meaning he didn’t have to cross rivers or walk through the desert for days.

“They risk all of it — life, house, land, all — to get there.”

José lived in the U.S. for more than a decade, in Los Angeles and Atlanta, working as an entrepreneur. But in 2010 he got deported back to Guatemala, and his life began to fall apart. When migrants return to their home country, they are often seen as failures or looked at with suspicion if they were deported.

“In the United States, they see you as a criminal for having crossed the border,” José said. “In Guatemala, for having been returned, they see you as a criminal.”

Zunil, Guatemala.

Farmers sort through onion crops near Zunzil, Guatemala. Photo: Megan Janetsky/VICE News.

José has been socially outcast. “When I arrived, my own family began to defame me,” he said, adding they spread false rumors that he’d been in jail and sold drugs in the U.S. José has struggled to find work as a result, and said he’s received threats against his life since returning. VICE News is withholding his last name as a result.

“I live in a critical situation,” said José. “I’ve suffered more hunger in my country after having been returned than I did on my journey from Guatemala to the United States.”


José is just one of more than 400,000 Guatemalans who’ve been deported from the U.S. in the past 10 years.

Now, he wants to return to the United States. He’s considering requesting a visa. But in the likely event that doesn’t work, he’d need to hire a coyote to smuggle him. But prices have skyrocketed. José has approached coyotes to ask their rates, and been told the journey would cost about $16,000 today.

For José, that would be impossible. After being pushed out by his family, he no longer has a house in Guatemala and doesn’t have assets to leave as collateral on a loan.

Many deportees, experts say, still likely haven’t finished repaying their debt, putting their homes and family’s well-being at risk. In Guatemala — a country where about half the population is indigenous — having land and a home is a key part of Mayan culture. Not having an inheritance for your children is seen as shameful.

Johnson said that means deportations can actually have the opposite effect of deterrence. When people are deported and they end up getting dispossessed or selling land, you're creating a new generation of potential migrants,” Johnson said. Their children will “look to the United States really seriously as a means of getting out of the poverty that they've been born into.”

READ: Trump's asylum policies sent him back to Mexico. He was kidnapped five hours later by a cartel.

Guatemalan farmer Cruz Pelico is considering a second attempt to make it into the U.S. He migrated to Oklahoma when he was 19, and managed to pay off his debt by washing dishes at an IHOP.


But he returned home less than a year later when his mother fell ill.

Now, eight years later, Pelico earns about 75 quetzales a day — less than $10 — farming the rolling hills outside of Zunil. And he has a 5-year-old son.

But he’s afraid — not for the journey through the desert, nor the intensified U.S. border enforcement, but for having to once again put up his father’s home as collateral. This time it would be for a much heftier price than the 60,000 quetzales, about $7,700, he paid last time.

But he says it may still be his best option. “Earning 75 quetzales with my family, you aren't able to survive,” Pelico said. “That's why so many people go and risk their lives, to earn a little more. That's why they risk all of it — life, house, land, all — to get there.”

But Maria ruminates over that risk every day as she weaves textiles and works in the local market, doing anything to scrape together extra cash.

Their small concrete house is high up in the hills in their town. Daniela’s younger sister and her three children also live there. Maria’s five grandchildren bustle around the two toy-littered rooms and in and out of the doorway.

When Daniela left, her goal was to lift her family out of poverty and return to Guatemala to be reunited with her daughters.

They’ve been in a sort of limbo ever since. Despite the U.S.’ economic crisis, Maria is clinging to hope that Daniela will walk through the door, successful in her mission.

“She has to return. It wasn't an option,” said Maria firmly. “She'll fulfill her dreams this one time, and then she'll return soon.”

Cover: Maria and her grandchildren pose for a portrait inside her home in Zunil, Guatemala on March 14, 2020. Photo: Megan Janetsky/VICE News.