Increasing Access to Capital in the Rio Grande Valley
In 2011, the Rio Grande Valley of Texas was one of the poorest regions in the United States. There was a lack of infrastructure and limited access to traditional lenders. At the same time, institutional investors were struggling to find new opportunities to deploy capital and earn even modest returns given the then low interest rate environment. To discuss this opportunity to match resources and needs, the Milken Institute, with support from the Ford Foundation, convened a Financial Innovations Lab in Weslaco Texas in October 2011.
Because Lab participants represented a diverse set of interests in the lower Rio Grande valley, much of the conversation focused on the consumer perspective. Specifically, how development efforts could become less fragmented and better coordinated. The lab suggested a number of policy and financial innovations to incent new capital investment and help the Valley break out of poverty through the expansion of federal programs providing capital to communities and the deployment of the next generation of program-related investments by foundations. A major lab outcome was the recognition that the Valley’s way forward lies in fully developing its human capital. Participants in the lab outlined steps for programs that educate and empower local residents, creating opportunities for them to build home equity, financial literacy, and entrepreneurial skills. The lab concluded with specific plans to standardize financial products and to create a regional leadership council focused on economic prosperity. Further, participants formed a coalition to continue the process of coordinating, targeting, and expanding development efforts aimed at sustainable economic growth.