Exumbran Social Investment Bank (ESIB)
The Exumbran Social Investment Bank (ESIB) is a 'commission' of the Exumbran Convention founded by the Agreement on the Exumbran Social Investment Bank, which entered into force with the Treaty of the Exumbran Convention, and which thereafter came to be known and treated as the Exumbran Council Regulation on the Exumbran Social Investment Bank (ECR.ESIB). ECR.ESIB regulates purpose, funding, organization, and key procedures of the ESIB. The main purpose of ESIB is to loan money for relatively high risk private investment with expected benefits for more than just the private investor (where higher risk needs to be compensated with more expected social/economic benefits, favoring locations where that is needed most), in accordance with the second and third objectives of the Exumbran Convention as mentioned in article 2 of its founding treaty.
ESIB is governed by its Executive Committee (ESIB-EC) and Advisory Board (ESIB-AB)
ESIB-AB consists of at least 10 and at most twice as many members as there are member states. Every member state must be represented by at least one Board member. The Board selects and appoints members by co-option, but candidates may be suggested by the Executive Committee. These and all other Board procedures normally proceed through email. (In normal circumstances, Board members do not (ever) have to meet.) Board members are selected and appointed to increase the overall knowledge and expertise of the Board, and must have relevant knowledge and experience with regards to banking, (micro)finance, (small) business, and/or economics.
ESIB-EC is presided by the Chief Executive. Members of the Executive Committee are appointed by the Exumbran Council after having obtained majority obtained majority approval from the Advisory Board. (Like the members of the Advisory Board, the members of the Executive Committee are bankers or economists, not politicians or diplomats.)
The Exumbran Social Investment Bank (ESIB) is mainly funded by means of a non-transferable bonds system. Governments and private investors can buy bonds with a guaranteed return that is set at a rate comparable to those of government bonds of developed member states of the Exumbran Convention or above.
ESIB has an expected loss rate of 4% (meaning that there is an expected repayment rate of 96%), and and interest rate equal to the average interest rate for small business loans in developed countries (generally between 6 and 8%). The annual loss resulting from these limitations is funded by the Exumbran Convention up to a maximum of 0.007% of the sum GDP of the member states. The annual 'commission budget' of the Exumbran Convention for ESIB is equal to this amount with the provision that funds not needed to cover losses of ESIB due to aforementioned limitations are transferred to the Exumbran Development Commission (EDC).