DMG is a mysterious holding company with branches in several Colombian towns known principally for coca cultivation and armed-group activity. In Putumayo department, DMG has offices in Puerto AsÃs, VillagarzÃ³n, La Hormiga, Orito, Mocoa, and Sibundoy. A DMG branch exists in the coca boomtowns of Llorente, NariÃ±o; Granada, Meta; and MontelÃbano, CÃ³rdoba. (Click on the Colombian flag at the top of their website and look at the map of their locations.)
Their business model sounds miraculous: you give them your money, they offer incredible rates of return – you can double your investment in six months. How is that possible? Where is DMG’s money coming from?
As with too many things in Colombia, nobody seems to be asking. Here is an excerpt from an article that appeared in August in the Colombian newsweekly Semana, which raises at least as many questions as it answers.
For the last two years, a unique economic situation has calmed the income anxiety of those who live in this distant zone of the country [Putumayo], which since the 1990s has based its economy on coca cultivation and harvesting.
It is called DMG. … Long lines along Villacolombia or Calle Mocha, in Mocoa, the capital, show the level of impact that this financial phenomenon has in this region’s society.
Many arrive as much as two days before the payment day. Months ago they had left millions and millions of pesos in DMG’s coffers. Some, all of their savings. Others, what they got from selling their house, their car or their farm. There are even some who have taken out bank loans in order to invest the cash in this magical way of increasing their capital. When they arrive at the branch, the person receives the “benefit” of his investment, as agreed in each contract. Interest rates of 10, 15, 30, 50 percent, and during “special offer” periods even 100 percent.
Ten million pesos in DMG’s hands for six months can be turned into 20 million. Or if you prefer a monthly payment, they will give you 100,000 pesos every 30 days. That is, 10 percent. [The author must mean a million pesos every 30 days.] One can choose whichever way one prefers. Either way it is well above what any bank would pay to a savings account holder.
… David MurcÃa GuzmÃ¡n is the person behind this miraculous system. A young man of less than 30 years about whom little is known in the region. Only that one day he came to six of Putumayo’s 13 municipalities and set up his business.
The DMG offices, the local population says, have strong safes to hold the cash that arrives at the regional airports and is transported along the department’s awful roads by armored, escorted cars.
There is nothing clear about this business. There are no sanctions from the Superintendencia Financiera [Colombia's bank-oversight agency], there are no results from the preliminary investigations that the FiscalÃa [Prosecutor-General's office] began at the end of 2006. But the business is so prosperous, that in a zone where the narco-economy led the parade for years, it is easy to imagine that something strange is behind this surprising way of getting many out of poverty.
But this matters to very few. In the region, people are so content with DMG that any politician who wants to campaign and win elections in Putumayo would do well not to get involved. “A legislator asked in public about the origin of this money and called for an investigation, and the next day he had thousands of opponents in the department. The people will not allow this subsistence source to be taken from them,” commented a departmental government official.