Juntas are an informal way for people to get “large” sums of money in Peru.  Several of the entrepreneurs we work with organize juntas and many others participate in them.  For some, it seems to be a way to save money when they do not have a lot of willpower to do it on their own.  For others, it is essentially a loan that is paid back without interest.  The basic concept of a junta is that you pay a certain quantity daily, weekly, or monthly.  When it is your turn, you get the entire amount invested.  Everyone puts in the same amount. 

There are three kinds of juntas.  The first kind is similar to a lottery.  Let’s say the junta requires a weekly payment of 100 Soles (the local currency) for 10 weeks.    Over a period of 10 weeks your contribution will be 1000 Soles.  Each week everyone in the junta gets together for a drawing.  The person who is selected at random, collects their 1000 Soles that week.  If it is the first week, the person will continue to pay the 100 Soles per week for the following 9 weeks.  For that person the junta acts more like a loan.

There is also a fixed number system.  Each person in the junta is given a number by the person who organizes it.  The organizer, of course, gets number one.  If it is, for example, a daily junta of one Sol for 30 days, each person will collect the thirty Soles in number order.  If your friend is the organizer, you can probably get one of the lower numbers.  You can swap numbers with someone for the right price if you need the cash sooner than someone else.

 The third type of junta is primarily based on need.  Each week, people in the junta write down the percentage loss they are willing to take on the total amount based on their current need for cash.  The person who notes the largest discount takes the cash.

 Juntas are even used to purchase vehicles!  The Association of Professional Taxi Drivers organizes a junta that lasts for three years.  One-hundred participants enter the junta with a $25 sign-up fee and $45 per week.  The organizer is an individual with access to a line of credit or savings that can be used to purchase vehicles.  In the first week, the organizer will earn $7,000, which is combined with the individual’s line of credit or personal savings to purchase five vehicles.  During the first week, the five vehicles are given out through a lottery system.  Once a person has a vehicle, they must pay $85 per week instead of $45.  The taxi drivers benefit from the junta because the cost to rent a car is so high.  Taxi drivers who do not own their own vehicle pay about $120 per week to rent.  It is somewhat similar to a rent to own payment plan. 

 The list goes on in terms of variations of juntas.  They are commonly used by entrepreneurs with businesses of all sizes to access capital in Peru.

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