JPMorgan will increase the investment it made in Detroit City by $50 million following the success of its original investment. According to bank executives and city officials, there had been encouraging signs that via public-private partnerships the city was experiencing urban renewal.
Three years ago, the largest bank in the United States committed $100 million to Detroit. The investment came at a time when the city had filed for bankruptcy following the recession which had greatly impacted the auto sector in the United States causing it to almost collapse. Besides the recession, the city had also been in economic decline for six decades and the population numbers had been falling.
So far JPMorgan has invested $107 million and this has gone towards offering credit to small business owners, job-skills training, residential and commercial redevelopment and funding of blight removal. The biggest bank in the United States now intends to reinvest about $13 million emanating from loan repayments. According to JPMorgan’s corporate responsibility head, Peter Scher, the bank also plans to commit to offering an extra $30 million.
Though the $150 million that JPMorgan has committed is small considering that the bank has a balance sheet of $2.5 trillion, it makes business sense for the giant bank. This is because it is the largest financial institution in Detroit and therefore stands to reap from a revival of the city. JPMorgan’s chief executive officer Jamie Dimon has shown a personal interest in this endeavor and has visited at least 6 times in order to check on progress.
Some of the city dwellers Dimon has met in Detroit include contractors who were in need of working capital for the repair of homes. He has also met food entrepreneurs who required shared commercial kitchens they could use for their sausage-making and bread-baking businesses.
Among those who have worked with JPMorgan towards the revival of Detroit include the mayor of the city, Mike Duggan. Dimon has attributed the success that has so far been achieved to the cooperation of leaders.
“Detroit’s resurgence is a model for what can be accomplished when leaders work together to create economic growth and opportunity,” a statement issued to Reuters by Dimon said.
At its peak Detroit was at one time the fifth biggest city in the United States. Then it had a population of 1.85 million people. Currently the population of the city is estimated to be around 670,000 which is the lowest it has been since 1850.