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    Top OTCBB Watch – WikiLoan Continues 250% Rally Supported by First Purchase Order

    WikiLoan Inc. (OTCBB: WKLI) stock price is up 250% since the beginning of September, ending the October 18 trading session at $0.81. The announcement of the first purchase order, as well as the growing visibility of the company in the peer-to-peer lending community is responsible for this stellar appreciation.

    WikiLoan operates a social network site with a focus on finance. At WikiLoan.com, family and friends can borrow and lend money among themselves at rates that make sense to all parties. The Web site provides repayment schedules and documentation for loans, along with proprietary administrative tools, enabling users to securely pull credit reports and automate the loan repayment process.

    Borrowers go through a simple process to create a loan listing between $1,000 and $25,000. They set the rate they are willing to pay for the loan, get their WikiScore, and invite friends in their network to view the listing. Lenders receive an invitation to view a listing and are provided with the borrower’s WikiScore, debt-to-income ratio, and the loan repayment schedule. Once the loan is fulfilled, WikiLoan compiles the promissory note and provides it to all involved parties. The company handles on-going notifications and provides access to online payment systems to ensure a smooth repayment process.

    WikiLoan generates revenues through fees for documentation, credit score checks and administrative services. Based on the company’s revenue model, it earns revenue from the fees for the services it provides which are; $25 for credit scoring; $35 for loan documentation; and a 1% annual administrative fee on the adjusted outstanding principle from the lender. The company plans to develop additional revenue streams with Web site advertising, credit card and auto loan origination and/or referral fees likely showing the most realistic near-term potentials.

    As a result, WikiLoan has recently announced that it developed the first “WikiCash Card” branded phone cards in collaboration with SDI Distributors NJ Inc.  The cards will be sold through SDI’s distribution channel that reaches more than 20,000 retail locations nationwide and generated over $165 million in revenue in 2009. Moreover, WikiLoan announced that it has printed the first 200,000 WikiCash Phone Cards and related collateral advertising material.  The company has also announced the first purchase order for 100,000 cards, which represents more than $170,000 in revenue that should be booked in the fourth quarter.

    The market opportunity for WikiLoan is significant considering the ongoing financial crisis, bank consolidations and changing consumer behavior with regards to online lending, borrowing and banking. In the midst of current economic conditions, peer-to-peer lending has become one of the fastest growing sectors of the financial services industry and the company is well positioned to capitalize on its ongoing growth. In addition, the popularity and the ubiquity of the Internet are certainly other factors driving the peer-to-peer lending market forward.

    As a result of an overheated housing sector, and other economic factors, financial institutions have significantly tightened credit standards making it difficult for many consumers to acquire non-collateralized personal loans.  Such loans that are available have become considerably more expensive over the past year.   Through WikiLoan peer-to-peer lending process, borrowers are able to access funds at rates that typically range from 10% to 16%, which compare very favorably to credit card advances, which are often more than 25% annually or short-term consumer loans, which are often made at more than 100% interest per year.

    Peer to peer lenders also realize significant potential benefits.  Compared to the estimated return typically earned on cash deposits, which can range from 2% and below, peer-to-peer lending offers lenders a chance to participate in investment opportunities with much higher returns.  Peer-to-peer lending also offers socially positive benefits to lenders that many find attractive.

    Benefiting from tightened credit standards, growing demand for peer-to-peer lending and the power of the Internet, WikiLoan is well positioned to emerge as a leading peer-to-peer lending platform. In addition, the recent initiative to print and distribute WikiCash Phone Cards will allow the company to expose its brand to a large segment of the peer-to-peer lending community and to enhance the emerging revenue streams.

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