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Wireless networks consisting of compact antennas find applications in diverse areas such as communication systems, direction of arrival estimation, sensor networks, and imaging. The effectiveness of many of these systems depend on maximizing the reception of RF power and extracting maximum information from the incident electromagnetic (EM) wave. Traditionally, this has been achieved through multiple-input multiple-output (MIMO) systems employing a spatial array of antennas that enhance the channel capacity. In this paper, we report similar increases in channel capacity obtained through the use of vector antennas consisting of co-located loops and dipoles, which can respond to more than one component of the EM field. It is shown that systems with three- and four-element vector antennas at both the transmitter and receiver operating around the frequency of 2.25 GHz support three and four times more information, respectively, as compared to conventional systems consisting of sensors with single antennas. Comparison with a simplified theoretical model of a MIMO system with co-located antennas in a rich multipath environment shows good agreement.