1216752--1/11/2008--PIONEER_FINANCIAL_SERVICES

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{capital, credit, financial}

MBD may modify underwriting and servicing standards and does not have to lend to the traditional customers who meet our business model and lending guidelines. Each of these may materially adversely affect our business operations, cash flow, results of operations, financial condition and profitability. We purchase loans which were made exclusively to the military market, which traditionally has higher delinquencies than customers in other markets, resulting in higher charge-offs, a reduction in profitability and impairment to our ability to pay interest and principal on the investment notes. An increase in market interest rates may result in a reduction in our profitability and impair our ability to pay interest and principal on the investment notes. Acts of war or terrorist attacks in the United States may cause disruption in our business and may adversely affect the markets in which our suppliers of loans operate, which could affect our profitability and ability to pay interest and principal on the investment notes. If a large number of borrowers are wounded in combat, our profits may be adversely affected. We are subject to many laws and governmental regulations, and loss of licenses or any changes in these laws or regulations may materially adversely affect our results of operations, cash flow, financial condition and business operations. MBD and retail merchants are subject to many laws and governmental regulations, and loss of licenses or any changes in these laws or regulations may materially adversely affect our results of operations, cash flow, financial condition and business operations. Our reinsurance program is also subject to state and federal laws and regulations and any changes in these laws or regulations may materially adversely affect our results of operations, cash flow, financial condition and business operations. As long as the investment notes are outstanding, we are subject to federal and state securities laws and regulations and failure to comply with or changes in such laws and regulations may adversely affect us or increase substantially the disclosure required by us. The indenture does not contain extensive covenants to protect your investment in the notes. Almost all of our loan customers are active-duty military or federal government employees who could be instructed not to do business with MBD or us, or access to the Government Allotment System could be denied. Our profitability and future growth depend on our continued access to financing from sources such as banks. If a customer leaves the military prior to repaying the military loan, there is an increased risk that loan will not be repaid. The laws and regulations of the Nevada insurance authority may restrict our reinsurance subsidiary s ability to distribute available cash to us. We have limited restrictions on the payments we may make to our parent, MCFC. Our ability to disperse our working capital could diminish our ability to pay interest and principal on the investment notes. Loss of key officers could have an adverse effect on our operations.

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1216752--1/11/2008--PIONEER_FINANCIAL_SERVICES_INC