For a single antenna channel, Shannon's classical capacity formula predicts a capacity increase of approximately 1 bit/cycle for every 3 dB increase in signal to noise ratio (SNR). Consequently in multiple antenna arrays, with n antenna elements, the increase in capacity can be in the order of the number of antenna elements, n more bits/cycle for each 3dB increase in SNR. This tremendous gain in capacity exhibited by MIMO channels over single antenna systems illustrates the enormous potential in wireless communications systems. This paper presents, for an indoor multi-element antenna system, a geometric model incorporating local scatterers around the fixed receiver and transmitter. This model considers uniform scattering at the transmitter and non-isotropic scattering using the von Mises pdf at the receiver. The derived correlation function includes some key elements, such as antenna element spacing, degree of scattering, angle of arrival at user and array configuration in MIMO channels. The capacity of the MIMO fading channel with varying number of antenna elements, the degree of isotropic scattering at receiver, the spacing between the antenna elements and the effect of varying signal to noise ratio are investigated and presented for the chosen model.