JP Morgan Chase pledged $500 million for a new project called AdvancingCities which aims to enhance economic growth in 30 cities across the world, targeting an additional $1.5 billion in outside capital from financial entities and big philanthropic institutions. The project was patterned after a successful scheme implemented in Detroit, Chicago, and Washington.
To be able to qualify for the grants and low-cost loans, interested cities shall propose programs that will address at least two of these issues: gaps in jobs and skills, growth among the small business sector, rehabilitation of the community, and financial health. The cities to be selected shall demonstrate a strong existing collaboration between its private and public sectors. They should have the desire to open equal opportunities for community members who are at risk of being neglected when economic growth happens within the neighborhood. Ultimately, the sense of inclusivity must be extremely strong in the cities.
Jamie Dimon, Chairman, and CEO of JPMorgan Chase said the program is designed to address the fact that economic opportunity is not equally distributed among communities. He said businesses must go the extra mile of changing this condition by creating schemes that will ensure a better future for all. The multinational investment bank and financial services company think that enhancing economic opportunity across cities is in its best interest and the right thing to do, Dimon said.
Peter Scher, head of corporate responsibility is heading the AdvancingCities. Through the project, JP Morgan expects its investment to leverage an additional $1 billion in outside capital. This estimate was based on the outcome of a similar model JPMorgan has first launched in Detroit.
The investment bank previously gave Detroit $50 million in loan funds to support the Community Development Financial Institutions. The scheme leveraged more than $233 million from third-party investors. JPMorgan had also been involved with the PRO Neighborhoods initiative which allowed the association to leverage an additional $549 million in capital for community rehabilitation.
The project with Detroit began in 2013, Business Insider reported. Back then, JPMorgan exerted effort to help Detroit get back on its feet after it declared bankruptcy.
By 2014, JPMorgan began collaborating with Mayor Mike Duggan in dispersing low-cost loans, rehabilitating affordable housing projects, and engaging Detroit's workforce in several skills training. The bank has since invested over $100 million in Detroit.
After the successful outcome in Detroit, JPMorgan decided to adopt the same scheme in Chicago and Washington DC, with some funds extending to the South Bronx and San Francisco.