ABSTRACT
Rural areas of the United States suffer from slow economic growth and low per capita incomes. Much of this is related to the lack of higher risk debt capital and equity/venture capital (VC). This chapter documents the extent of the problem by examining banking and equity investment patterns across America from a comparative urban and rural perspective. Low bank loan to deposit ratios and the lack of active VC firms and venture investments in rural areas are critical problems. A comparative analysis of innovative approaches to “nontraditional” VC in rural areas is provided. A special focus on the Mississippi Delta Region and Illinois further illustrates the problems and potential solutions at the local and regional levels. Finally, some synthesized solutions are suggested for consideration by Midwestern and national policymakers, with an aim to increase both equity and debt investment in rural America.
