UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                         Washington, DC  20549

                           FORM 10-KSB

X  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934

               For the fiscal year ended March 31, 1999


   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
   EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

        For the transition period from ________ to _________.

                   Commission file number: 0-26680


                       NICHOLAS FINANCIAL, INC.
            (Name of Small Business Issuer in its Charter)

       British Columbia, Canada                   8736-3354
   (State or Other Jurisdiction of             (I.R.S. Employer
    Incorporation or Organization            Identification No.)

 2454 McMullen Booth Road, Building C
        Clearwater, Florida                         33759
(Address of Principal Executive Offices)          (Zip Code)

    Issuer's Telephone Number, Including Area Code: (727) 726-0763
    Securities registered under Section 12(b) of the Exchange Act:

                                                 Name of Each Exchange
     Title of Each Class                          on Which Registered

             None
      __________________                           __________________
      __________________                           __________________

Securities registered under Section 12(g) of the Exchange Act:

                      COMMON STOCK, No par value
                           (Title of Class)

Check  whether the issuer: (1) filed all reports required to be  filed
by  Section 13 or 15(d) of the Exchange Act during the past 12  months
(or  for such shorter period that the registrant was required to  file
such  reports),  and (2) has been subject to such filing  requirements
for the past 90 days.
Yes [X]   No []


Check  if  disclosure of delinquent filers pursuant  to  Item  405  of
regulation  S-B is not contained in this form, and no disclosure  will
be contained, to the best of the registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part  III
of this Form 10-KSB or any amendment to this Form 10-KSB.  [   ]

The issuer's revenues for its most recent fiscal year were $10,418,538
As  of May 31, 1999, 2,349,108 shares of the Registrant's common stock
were outstanding, and the aggregate market value of the shares held by
non-affiliates was approximately $5,893,998

DOCUMENTS INCORPORATED BY REFERENCE:
     Proxy Statement, dated June 29, 1999.
     Form 10-KSB Reference: Part III, Items 9, 10  and 11
Transitional Small Business Disclosure Format (check one): Yes[] No[X]

<PAGE> 1

                       NICHOLAS FINANCIAL, INC.
                       FORM 10-KSB ANNUAL REPORT
                           TABLE OF CONTENTS

PART I                                                   Page No.

     Item 1.      Description of Business.....................2
     Item 2.      Description of Properties..................10
     Item 3.      Legal Proceedings..........................10
     Item 4.      Submission of Matters to a Vote of
                   Security Holders..........................11

PART II

     Item 5.      Market for Common Equity and Related
                   Stockholder Matters.......................11
     Item 6.      Management's Discussion and Analysis
                   of Financial Condition  and Results
                   of Operations.............................12
     Item 7.      Financial Statements.......................19
     Item 8.      Changes In and Disagreements With
                   Accountants on Accounting and
                   Financial Disclosure......................19

PART III

     Item 9.      Directors, Executive Officers,
                   Promoters and Control Persons;
                   Compliance with Section 16 (a)
                   of the Exchange Act.......................20
     Item 10.     Executive Compensation.....................20
     Item 11.     Security Ownership of Certain Beneficial
                   Owners and Management.....................21
     Item 12.     Certain Relationships and Related
                   Transactions..............................21
                  Item 13. Exhibits and Reports on
                   Form 8-K..................................22



Forward-Looking Information

       This  10-K  contains  various  forward-looking  statements  and
information that are based on management's beliefs and assumptions, as
well  as information currently available to management.  When used  in
this  document,  the  words  "anticipate," "estimate,"  "expect,"  and
similar   expressions   are   intended  to  identify   forward-looking
statements.   Although  Nicholas  Financial,  Inc.  ;  including   its
subsidiaries ("the Company") believes that the expectations  reflected
in  such  forward-looking statements are reasonable, it  can  give  no
assurance  that  such  expectations will prove to  be  correct.   Such
statements   are   subject   to  certain  risks,   uncertainties   and
assumptions.   Should  one  or more of these  risks  or  uncertainties
materialize, or should underlying assumptions prove incorrect,  actual
results  may  vary  materially from those  anticipated,  estimated  or
expected.  Among the key factors that may have a direct bearing on the
Company's  operating  results are fluctuations  in  the  economy,  the
degree  and  nature  of competition, fluctuations in  interest  rates,
demand  for  consumer financing in the markets served by the  Company,
the  Company's  products and services, increases in the default  rates
experienced on Contracts, adverse regulatory changes in the  Company's
existing  and future markets, and the Company's ability to expand  its
business, including its ability to complete acquisitions and integrate
the operations of acquired businesses, to recruit and retain qualified
employees,  to expand into new markets and to maintain profit  margins
in the face of increased pricing competition.

<PAGE> 2

                                PART I
Item 1.     Description of Business

General

      Nicholas  Financial,  Inc. ("Nicholas  Financial-Canada")  is  a
Canadian  holding  company  incorporated under  the  laws  of  British
Columbia  in  1986.   The business activities of  Nicholas  Financial-
Canada  are  conducted  through its wholly-owned  subsidiaries  formed
pursuant to the laws of the State of Florida, Nicholas Financial, Inc.
("Nicholas  Financial")  and Nicholas Data  Services,  Inc.,  ("NDS").
Nicholas  Financial is a specialized consumer finance company  engaged
primarily  in  acquiring  and  servicing installment  sales  contracts
("Contracts")  for  purchases of new and used  automobiles  and  light
trucks.  To  a  lesser extent, the Company also makes direct  consumer
loans   and   sells  consumer-finance  related  products   ("Insurance
Products").   NDS is engaged in designing, developing,  marketing  and
support  of industry specific computer application software for  small
businesses located primarily in the Southeast United States.  Nicholas
Financial's  financing activities accounted for approximately  95%  of
consolidated  revenues for the fiscal year ended March  31,  1999  and
NDS's  activities  accounted for approximately  5%  of  such  revenues
during the same period.

       Nicholas  Financial-Canada,  Nicholas  Financial  and  NDS  are
hereafter collectively referred to as the "Company".  Unless otherwise
specified,  all financial information herein is designated  in  United
States currency.

      The  Company's principal executive offices are located  at  2454
McMullen  Booth  Road, Building C, Clearwater Florida 33759,  and  its
telephone number is (727) 726-0763.


Automobile Finance Business

      The  Company  is engaged in the business of providing  financing
programs, primarily on behalf of purchasers of new and used  cars  and
light  trucks who meet the Company's credit standards, but who do  not
meet  the  credit standards of traditional lenders, such as banks  and
credit  unions, because of the age of the vehicle being financed,  the
customer's  job  instability  or credit  history.  Unlike  traditional
lenders, which look primarily to the credit history of the borrower in
making  lending  decisions and typically finance new automobiles,  the
Company  is  willing  to  purchase  installment  sales  contracts  for
purchases made by borrowers who do not have a good credit history  and
for  older  model  and high mileage automobiles. In  making  decisions
regarding the purchase of a particular installment sales contract  the
Company considers the following factors related to the borrower: place
and  length  of  residence, current and prior job status,  history  in
making installment payments for automobiles, current income and credit
history.  In addition, the Company examines its prior experience  with
Contracts  purchased  from  the  dealer  from  which  the  Company  is
purchasing  the Contract, and the value of the automobile in  relation
to the purchase price and the term of the installment sales contract.

     The Company's automobile finance programs are currently conducted
in  Florida  and Georgia only under the name Nicholas Financial,  Inc.
The  Company  currently operates twelve branch offices in Florida  and
two  branch offices in Georgia.  As of March 31, 1999 the Company  had
non-exclusive  agreements  with  approximately  500  dealers  for  the
purchase of retail installment sales contracts (the "Contracts")  that
meet  the Company's financing criteria.  The dealer agreements require
the  dealer  to  originate Contracts in accordance with the  Company's
guidelines.

      From July 1990 through March 31, 1999, the Company had purchased
19,060   Contracts  with  an  initial  principal  amount   aggregating
approximately  $133,838,223. The average initial principal  amount  of
Contracts purchased by the Company was $7,022 and the contracts had an
average initial term of 36 months.  The Contracts were purchased  from
automobile dealers at an average discount of approximately 9.61%  from
their initial principal amount.

<PAGE> 3

     The obligors under the Contracts typically make down payments, in
the form of cash or trade-in, ranging from 5% to 20% of the sale price
of  the  vehicle financed.  The balance of the purchase price  of  the
vehicle  plus  taxes,  title  fees and, if  applicable,  premiums  for
extended  service  contracts,  accident and  health  insurance  and/or
credit life insurance, are generally financed over a period of  12  to
60  months.   Accident  and  health  insurance  coverage  enables  the
borrower to make required payments under the Contract in the event the
borrower  becomes unable to work because of illness  or  accident  and
credit  life  insurance  pays  the borrower's  obligations  under  the
Contract upon his or her death.

      The  annual  percentage  rate ("APR")  is  the  actual  cost  of
borrowing money, expressed in form of the annual interest rate payable
by the borrower.  The APR for Contracts purchased by the Company range
from  18%  to 30%. As of March 31, 1999, the average APR on  Contracts
purchased and currently outstanding is 24.11% and the average discount
from the initial principal amount is 9.92%.

      The Company purchases Contracts from the automobile dealer at  a
negotiated price that is less than the original principal amount being
financed  {the  discount} by the purchaser  of  the  automobile.   The
amount of the discount depends upon factors such as the age and  value
of  the  automobile  and the credit worthiness of  the  purchaser.  In
certain  markets, competition determines the discount that the company
can  charge. Historically, the Contracts purchased by the Company have
been  purchased at discounts that range from 5% to 30% of the original
principal  amount of the Contract.  In addition to the  discount,  the
Company  charges  the  dealer a processing fee  of  $75  per  Contract
purchased.  Virtually  all Contracts purchased by  the  Company  since
April  1,  1992  have  been purchased from dealers  without  recourse,
meaning that the Company, not the dealer, bears the risk of nonpayment
by  the  borrower  under the Contract. Prior to  April  1,  1992  some
Contracts  were  acquired with full recourse against  the  dealer  for
nonpayment  by the borrower.  As of March 31, 1999, substantially  all
of  the  Company's  loan portfolio consisted of  Contracts  that  were
purchased without recourse against the dealer.  Although substantially
all  the  Contracts  in  the Company's loan  portfolio  were  acquired
without  recourse,  the  dealer remains  liable  to  the  Company  for
liabilities  arising from certain representations and warranties  made
by  the dealer with respect to compliance with applicable federal  and
state laws and valid title to the vehicle.

      The  Company purchases a Contract only after the dealer (seller)
and  the Company arrive at a negotiated price for the Contract and the
dealer  has  provided the Company with the requisite  proof  that  the
vehicle  is  properly titled, that the Company has a  perfected  first
priority  lien on the financed vehicle, that the customer has obtained
the  required collision insurance naming the Company as loss payee and
the installment sales contract has been fully and accurately completed
and  validly executed. Once the Company has received and approved  all
required  documents, it pays the dealer for the Contract and commences
servicing the Contract through maturity.

      The  Company  requires the owner of the vehicle  to  obtain  and
maintain  collision insurance, naming the Company as the  loss  payee,
with  a deductible of not more than $500.  The Company does not  offer
collision insurance. Both the Company and its dealers offer purchasers
of  vehicles  certain  other  "add on products".  These  products  are
offered  by  the dealer on behalf of the Company or by the  automobile
dealer  on behalf of the dealership at the time of sale. They  consist
of  a  roadside assistance plan, extended warranty protection,  credit
life  insurance,  credit  accident and  health  insurance  and  credit
property  insurance. If the purchaser so desires, the  cost  of  these
products  may  be included in the amount financed under the  Contract.
As  of  March  31,  1999,  approximately 25% of  the  borrowers  under
Contracts in the Company's loan portfolio had elected to purchase "add
on products".

<PAGE> 3

Direct Consumer Loans

      Although  the Company is licensed to make small direct  consumer
loans up to $25,000, the average loan made to date by the Company  had
an initial principal balance of approximately $2,500. The Company does
not  expect the average loan size to increase significantly within the
foreseeable future and does not presently intend to make loans at  the
maximum  size  permitted under its license.  The Company offers  loans
primarily to borrowers under the Contracts previously purchased by the
Company.   In  deciding whether or not to make  a  loan,  the  Company
considers  the individual's credit history, job stability, income  and
impressions  created during a personal interview with a  Company  loan
officer.   Additionally,  because  approximately  90%  of  the  direct
consumer  loans  made  to  date  have been  made  to  borrowers  under
Contracts previously purchased by the Company, the payment history  of
the  borrower under the Contract is a significant factor in making the
loan  decision.   The direct consumer loan program was implemented  in
April  1995  and is not currently a significant source of revenue  for
the Company.  As of March 31, 1999, loans made by the Company pursuant
to  its direct consumer loan program constituted approximately 3.2% of
the aggregate principal amount of the Company's loan portfolio.  As of
March 31, 1999, the average APR for direct consumer loans made by  the
Company  was 27.91%, with a range of 18 to 30%. The Company  currently
typically purchases between 300 and 500 indirect contracts each  month
and originates between 50 and 100 direct consumer loans each month.

      In  connection with its direct consumer loan program the Company
also  offers  health and accident insurance coverage and  credit  life
insurance  to borrowers.  Borrowers in approximately 75%  of  the  621
loan  transactions  outstanding as of March 31, 1999  had  elected  to
purchase insurance coverage offered by the Company.  The cost of  this
insurance is included in the amount financed by the borrower.


Financing Sources

      The  Company  finances  the acquisition of  Contracts  with  its
retained  earnings, cash flow from operations, loans  from  investors,
insiders and a revolving line of credit with BankAmerica. In September
of   1998  the  Company  expanded  its  line  of  credit  capacity  to
$35million,  extended the maturity date of such line to June  3,  2001
and  reduced the rate of interest payable under the line. No assurance
can  be given that the size of such line will be increased or that the
maturity date will be extended beyond June 30, 2001.

     As of March 31, 1999, The Company owed approximately $1.6 million
to  7 investors who purchased notes issued by the Company. These notes
bear  interest  at  rates  from 10.5 % to  12%.  In  most  cases,  the
Company's  obligation to repay the note is subordinated to payment  of
its payment obligations under the BankAmerica line of credit.

      The BankAmerica line of credit is secured by finance receivables
and  other  assets of the Company. The interest rate  payable  by  the
Company  on  funds  drawn down under the line of credit  is  based  on
either  the  current  prime rate published by BankAmerica  or  several
Libor pricing options. In addition to interest, the Company also  pays
a  monthly  fee  to BankAmerica equal to .25% of the amount  available
under  the line of credit that has not been drawn down.  As  of  March
31,  1999, the Company had drawn down approximately $30 million  under
the  line of credit.  As of that date the interest rate payable by the
Company  under  the  line  of  credit was  approximately  7.34%.   The
revolving line expires on June 3, 2001.

<PAGE> 5

Underwriting Guidelines

      The  Company's typical customer is 30 years old, has  a  monthly
gross  income of $1,500 and a credit history that fails  to  meet  the
lending  standards of most banks and credit unions.  Among the  credit
problems  experienced by the Company's customers that  resulted  in  a
poor  credit  history are: unpaid revolving credit  card  obligations;
unpaid  medical  bills;  unpaid student loans; prior  bankruptcy;  and
evictions  for  nonpayment  of rent.  The Company  believes  that  its
customer profile is similar to that of its direct competitors.

      Prior to its approval of the purchase of a Contract, the Company
is  provided with a standardized credit application completed  by  the
consumer   which  contains  information  relating  to  the  consumer's
background,  employment, and credit history. The Company also  obtains
credit  reports from Equifax, TRW or TransUnion which are  independent
reporting  services.  The Company verifies the  consumer's  employment
history, income and residence. In most cases consumers are interviewed
by telephone by a Company application processor.

      The  Company utilizes internally prepared buying guidelines used
by  its  Branch Managers and underwriters  when purchasing  Contracts.
Any  contract that does not meet these guidelines must be approved  by
the  senior management of the Company. The Company currently has three
regional  managers charged with managing the specific  branches  in  a
defined  geographic area. In addition to a variety  of  administrative
duties,  the  Regional  Mangers are responsible for  monitoring  their
assigned   branch's   compliance  with  the   Company's   underwriting
standards.

       The   Company  continues  to  utilize  the  Special  Operations
Department,  ("SOD")  to perform on-site audits of  branch  compliance
with  Company buying guidelines. SOD will audit Company branches on  a
schedule that is variable depending on the size of the branch,  length
of  time  a  branch has been open, current tenure of  branch  manager,
previous  branch  audit  score  and  current  and  historical   branch
profitability.   SOD   reports  directly   to   the   Accounting   and
Administrative Management of the Company. The Company believes that an
independent review and audit of its branches that is not tied  to  the
sales  function  of  the  Company  is  imperative  as  it  results  in
information that is impartial.

      The  Company uses essentially the same criteria in  analyzing  a
direct  consumer  loan  as  it does in analyzing  the  purchase  of  a
Contract. Lending decisions regarding direct consumer loans  are  made
based  upon  a  review  of  the customer's  loan  application,  credit
history,  job stability, income, in-person interviews with  a  Company
loan  officer and the value of the collateral offered by the  borrower
to secure the loan.  To date, since approximately 90% of the Company's
direct loans have been made to individuals whose automobiles have been
financed  by  the  Company, the customer's payment history  under  the
automobile installment sale agreement is a significant factor  in  the
lending  decision.  The decision process with respect to the  purchase
of  Contracts  is  similar,  although, the  customer's  prior  payment
history with automobile loans is weighted more heavily in the decision
making  process  and  the  collateral value of  the  automobile  being
financed is considered.

      After reviewing the information included in the loan application
and  taking  the  other factors into account, Company  representatives
categorize  the  borrower using traditional credit classifications  of
"A",  indicating high creditworthiness, through "D", indicating  lower
creditworthiness.

      In  the  absence  of other factors, such as a favorable  payment
history on a Contract held by the Company, the Company generally makes
direct  consumer loans only to individuals rated in categories "B"  or
higher.   Contracts are financed for individuals who fall  within  all
four  acceptable rating categories utilized, "A" through "D".  Usually
borrowers who fall within the two highest categories are purchasing  a
two  to  four year old, low mileage used automobile from the inventory
of  a new car or (franchise dealer), while borrowers in the two lowest
categories  are purchasing an older, high mileage automobile  from  an
independent  used automobile dealer.  Approximately 5%  of  the  loans
financed  by the Company are with customers rated in the "A" category,
15% are rated "B",  70% are rated "C" and 10% are rated "D".

<PAGE> 6

      Upon  credit approval and the receipt of all required title  and
insurance documentation, the Company pays the dealer for the Contract.
The  Company  typically  purchases  the  Contract  for  a  price  that
approximates  the  wholesale value of the automobile  being  financed.
The  amount  the Company is willing to pay a dealer for  a  particular
Contract depends upon the credit rating of the customer.  The  Company
will  pay more (e.g. purchase the Contract at a smaller discount  from
the original principal amount) for Contracts as the credit risk of the
customer improves. The discounts from the initial principal amount  of
Contracts  purchased  by  the Company  range  from  5%  to  30%.   The
Company's  current  established guidelines for discounts  are  5%  for
borrowers  rated in the "A" category, 7.5% for those in the  "B",  10%
for  those in the "C" categories and 15% or more for those in the  "D"
category.  Purchases of Contracts at discounts that do not fall within
the  guidelines  require the prior approval of  the  Company's  senior
management.


Servicing and Monitoring of Contracts

      The  Company  requires  all customers  to  obtain  and  maintain
collision  insurance  covering damage  to  the  vehicle.   Failure  to
maintain  insurance constitutes a default under the Contract  and  the
Company  may  at  its  discretion, repossess the vehicle.   To  reduce
potential  loss due to insurance lapse, the Company has the legal  and
contractual  right  to  force  place  its  own  collateral  protection
insurance policy which covers loss due to physical damage to  vehicles
not covered by collision insurance.

      The Company's Management Information Services personnel maintain
a  number  of  reports to monitor compliance by borrowers  with  their
obligations  under  Contracts and direct loans made  by  the  Company.
These  reports  may  be accessed on a real-time basis  throughout  the
Company by management personnel, including branch office managers  and
staff,  at  computer  terminals located in the main  office  and  each
branch  office.   The  reports  include:  delinquency  aging  reports,
insurance  due reports, customer promises reports, vehicle information
reports,  purchase  reports,  dealer  analysis  reports,  static  pool
reports, and repossession reports.

      The  delinquency report is an aging report that  provides  basic
information regarding each account and reports accounts that are  past
due.   The  report  includes information such as the  account  number,
address  of the borrower, home and work phone numbers of the borrower,
original   term  of  the  Contract,  number  of  remaining   payments,
outstanding balance, due dates, date of last payment, number  of  days
past due, scheduled payment amount, amount of last payment, total past
due, and special payment arrangements or agreements.

      Accounts that are less than 120 days matured are included on the
delinquency report on the first day that the contract is contractually
past  due. After an account has matured more than 120 days, it is  not
included on the delinquency report until it is 11 days past due.  Once
an  account  becomes  30 days past due, repossession  proceedings  are
implemented  unless  the  borrower  provides  the  Company   with   an
acceptable  explanation for the delinquency and displays a willingness
and  ability to make the payment, and there is an agreed upon plan  to
return the account to current status.  When an account is 60 days past
due,  the Company ceases amortization of the Contract and repossession
proceedings are initiated.  At 120 days delinquent, if the vehicle has
not  yet been repossessed, the account is written off.  Once a vehicle
has  been  repossessed, the related loan balance no longer appears  on
the delinquency report.  It then appears on the Company's repossession
report and is sold, either at auction or to an automobile dealer.

      When  an  account  becomes delinquent, the  Company  immediately
contacts the borrower to determine the reason for the delinquency  and
to  determine if arrangements for payment can appropriately  be  made.
Once  payment arrangements acceptable to the Company have  been  made,
the  information is entered in its database and is used to generate  a
"Promises  Report",  which  is utilized by the  collection  staff  for
account follow up.

<PAGE> 7

      The  Company generates an insurance report to monitor compliance
with  the  insurance obligations imposed upon borrowers.  This  report
includes  the  account  number,  name and  address  of  the  borrower,
information regarding the insurance carrier, summarizes the  insurance
coverage,  identifies the expiration date of the policy, and  provides
basic  information regarding payment dates and term of  the  Contract.
This report helps the Company in identifying borrowers whose insurance
policy  is  up  for  renewal or in jeopardy of  being  canceled.   The
Company  sends  written  notices to, and makes  direct  contact  with,
borrowers  whose insurance policies are about to lapse or be canceled.
If  the borrower fails to provide proof of coverage within 30 days  of
notice, the Company has the option of purchasing insurance and  adding
the  cost  and  applicable  finance charges  to  the  balance  of  the
Contract.

       The  Company  prepares  a  repossession  report  that  provides
information  regarding repossessed vehicles and aids  the  Company  in
disposing   of  repossessed  vehicles.   In  addition  to  information
regarding the borrower, this report provides information regarding the
date of repossession, date the vehicle was sold, number of days it was
held  in  inventory  prior to sale, year and make  and  model  of  the
vehicle,  mileage,  payoff amount on the Contract,  NADA  book  value,
Black  Book  value,  suggested sale price, location  of  the  vehicle,
original  dealer, and notes other information that may be  helpful  to
the Company such as the condition of the vehicle.

      The Company also prepares a dealer analysis report that provides
information  regarding each dealer from which it purchases  Contracts.
This  report allows the Company to analyze the volume of business done
with  each  dealer and the terms on which it purchased Contracts  from
the dealer.

      The Company's policy is to aggressively pursue legal remedies to
collect  deficiencies from customers. Delinquency notices are sent  to
customers and verbal requests for payment are made beginning  when  an
account  becomes 11 days delinquent.  When an account becomes 30  days
delinquent   and  the  borrower  has  not  made  payment  arrangements
acceptable to the Company or has failed to respond to the requests for
payment,  a  repossession request form is prepared by the  responsible
branch  office  employee for approval by the branch  manager  for  the
vicinity  in  which the borrower lives. Once the repossession  request
has  been  approved, first by the Branch Manager and secondly  by  his
Regional Manager, it must then be approved by a corporate officer. The
repossessor delivers the vehicle to a secure location specified by the
Company  where  it  is held. The Company maintains relationships  with
several licensed repossession firms which repossess vehicles for  fees
that  range  from  $100  to  $300 for each  vehicle  repossessed.   As
required  by  Florida  and Georgia law, the customer  is  notified  by
certified  letter that the vehicle has been repossessed  and  that  to
retain  the  vehicle  he must make arrangements  satisfactory  to  the
Company  and  pay the amount owed under the Contract within  ten  days
after  delivery of the letter.  The minimum requirement for return  of
the  vehicle is payment of all past due amounts under the Contract and
all expenses associated with the repossession incurred by the Company.
If  satisfactory arrangements for return of the vehicle are  not  made
within  the  statutory period, the Company then  sends  title  to  the
vehicle  to  the state title transfer department which then  registers
the vehicle in the name of the Company.  The Company then either sells
the vehicle to a dealer or has it transported to an automobile auction
for  sale.  On average, approximately 30 days lapse between  the  time
the Company takes possession of a vehicle and the time it is sold by a
dealer or at auction.  During its most recent fiscal year, repossessed
vehicles have been sold at prices that average approximately $1,000 to
$1,500 less than the price paid by the Company for the Contract.  When
the  Company  determines  that there is  a  reasonable  likelihood  of
recovering  part or all of any deficiency against the  borrower  under
the  Contract, it pursues legal remedies available to it including law
suits,  judgement  liens  and  wage  garnishments.  Historically,  the
Company  has  recovered  approximately 15% of deficiencies  from  such
borrowers.

<PAGE> 8

Marketing and Advertising

      The  Company's  Contract marketing efforts are  directed  toward
automobile  dealers. The Company attempts to meet  dealers'  needs  by
offering   highly-responsive,  cost-competitive  and  service-oriented
financing  programs.  The Company relies on its  Regional  and  Branch
Managers  to  solicit agreements for the purchase  of  Contracts  with
automobile  dealers  located within a 25 mile radius  of  each  branch
office. The Branch manager provides dealers with information regarding
the Company and the general terms upon which the Company is willing to
purchase  Contracts.  The Company presently has no plans to  implement
any  other forms of advertising for the purchase of Contracts such  as
radio or newspaper advertisements.

      Currently,  the  primary  method  utilized  by  the  Company  in
soliciting borrowers under its direct consumer loan program is through
direct mailings followed by telephone calls to individuals who have  a
good  credit history with the Company with Contracts purchased by  the
Company.  The Company intends to expand its solicitation of such loans
when  management believes its staff is adequately trained to  evaluate
credit risks associated with such loans.


The  Industry

      The non-prime automobile finance market is highly fragmented and
historically  has  been serviced by a variety of  financial  entities,
including   captive   finance   subsidiaries   of   major   automobile
manufactures,  banks, independent finance companies,  and  small  loan
companies.  Many  of  these  financial entities  do  not  consistently
provide financing to this market. Although prime borrowers represent a
large  segment  of  the automobile financing market,  there  are  many
potential  purchasers  of  automobiles who do  not  qualify  as  prime
borrowers.  Purchasers  considered by  the  Company  to  be  non-prime
borrowers  are  generally  unable to obtain  credit  from  traditional
sources  of  automobile financing. The Company believes that,  because
these potential purchasers represent a substantial market, there is  a
demand  by  automobile dealers with respect to financing for non-prime
borrowers   that  has  not  been  effectively  served  by  traditional
automobile financing sources.

      In  the past four years the Company has seen several of its most
aggressive  competitors  report unexpected  losses  due  to,  but  not
limited  to,  inadequate reserves and accounting  irregularities.  The
Company  believes the circumstances causing the industry  turmoil  are
the  result  of  poor  reserve analysis, overall lack  of  responsible
financial  management and insufficient internal controls. The  Company
believes that its static pool reserve analysis, internal controls  and
experienced management team will continue its history of accurate  and
reliable  financial reporting, although no assurances can be given  in
this regard.


Computerized Information System

      The  Company's  operations utilize integrated  computer  systems
developed  by  NDS  to  enhance its ability  to  respond  to  customer
inquiries, to monitor the performance of its indirect and direct  loan
portfolio and the performance of individual borrowers under Contracts.
All  personnel  are  provided  with instant,  simultaneous  access  to
information  from a single shared database.  The Company  has  created
specialized programs to automate the tracking of loans from inception.
The  capacity  of the networking system includes the Company's  branch
office locations.  See the discussion above the caption Servicing  and
Monitoring  of  Contracts  for  a summary  of  the  different  reports
prepared by the Company.
Strategy

<PAGE> 9

      The Company's business strategy is to continue its growth and to
increase its profitability through greater penetration in its  current
markets,   controlled  geographic  expansion  into  new  markets   and
selective  portfolio acquisitions. As of the date of this report,  the
Company has no commitments or agreements in principle with respect  to
any   expansion   into  new  geographic  markets  or   any   portfolio
acquisitions.  The  Company  also intends to  continue  its  expansion
through the increased origination of additional direct consumer loans.
The Company believes that opportunity for growth continues to exist in
the  State  of Florida as well as Georgia and intends to continue  its
expansion  activities  there.  The  Company  is  also  exploring   the
possibility of expanding into North Carolina and or South Carolina.


Competition

       The   consumer  finance  industry  is  fragmented  and   highly
competitive.   There  are  numerous financial service  companies  that
provide consumer credit in the markets served by the Company including
banks, other consumer finance companies, and captive finance companies
owned  by  automobile  manufacturers and  retailers.   Many  of  these
companies  have significantly greater resources than the Company.  The
Company  does not believe that increased competition for the  purchase
of  Contracts will cause a reduction in the interest rate  payable  by
the  purchaser of the automobile.  However, increased competition  for
the  purchase of Contracts will enable automobile dealers to shop  for
the best price, thereby giving rise to an erosion in the discount from
the initial principal amount at which the Company would be willing  to
purchase Contracts.

     The Company's target market consists of persons who are generally
unable  to  obtain  traditional used car financing  because  of  their
credit  history, the vehicle's mileage or age.  The Company  has  been
able to expand its automobile finance business in the non-prime credit
market by offering to purchase Contracts on terms that are competitive
with those of other companies which purchase automobile receivables in
that  market segment.  Because of the daily contact that many  of  its
employees  have with automobile dealers located throughout the  market
areas  served by it, the Company is generally aware of the terms  upon
which  its  competitors  are  offering  to  purchase  Contracts.   The
Company's  policy  is  to  modify its terms  if  necessary  to  remain
competitive.  The  Company has no intention  and  will  not  sacrifice
credit  quality, its purchasing criteria or prudent business practices
in  order to meet the competition or be driven by unrealizable  growth
expectations. The Company expects to analyze new lending programs  and
marketing  methods  which may be implemented  with  the  objective  of
increasing  profits and or its market share, including the possibility
of  offering to purchase portfolios of seasoned Contracts from dealers
in bulk transactions from $50,000 to $5,000,000.

     The Company's ability to compete effectively with other companies
offering similar financing arrangements depends upon maintaining close
business  relationships with dealers of new  and  used  vehicles.   No
single  dealer out of the approximately 500 dealers that  the  Company
has  contractual  relationships with accounted  for  over  3%  of  its
business volume in 1999.

<PAGE> 10

Regulation

      The Company's financing and insurance operations are subject  to
regulation, supervision and licensing under various Federal, State and
local statutes and ordinances.  Additionally, the procedures that must
be  followed  by  the Company in connection with the  repossession  of
vehicles securing Contracts are regulated by the State of Florida  and
the  State  of Georgia.  To date, the Company's operations  have  been
conducted   exclusively  in  the  States  of  Florida   and   Georgia.
Accordingly, the laws of the State of Florida and Georgia as  well  as
applicable  Federal laws, govern the Company's operations.  Compliance
with  existing laws and regulations applicable to the Company has  not
had  a material adverse effect on the Company's operations. Management
believes that it maintains all requisite licenses and permits  and  is
in  material  compliance with all applicable Local, State and  Federal
regulations.

     The Company maintains a Retail Installment Seller's License and a
Sales  Finance Company License with the Florida Department of  Banking
and  Finance and the Georgia Secretary of State (Business  Services  &
Regulation).   Pursuant  to  regulations  of  the  State  of   Florida
governing  the Company's financing business activities, the Department
of  Banking  and  Finance conducts an on site audit  of  each  of  the
Company's branches annually, to monitor compliance with the applicable
regulations.   The regulations govern, among other matters,  licensure
requirements, requirements for maintenance of proper records,  payment
of  required  fees to the State of Florida and the State  of  Georgia,
maximum  interest rates that may be charged on loans to  finance  used
vehicles and proper disclosure to customers regarding financing terms.


Employees

      The Company's executive management and various support functions
are centralized at the Company's Corporate Headquarters in Clearwater,
Florida.   As  of March 31, 1999 the Company employed a  total  of  71
persons,  five of whom work for NDS and 66 of whom work  for  Nicholas
Financial.  The Company provides paid holidays, vacation,  sick  time,
jury  time, health and life insurance, long-term disability insurance,
dental  insurance, and a 401(k) plan for all employees.  No  employees
are  covered  by  a collective bargaining agreement  and  the  Company
believes it has good relations with its employees.


Item 2. Description of Properties

     The Company leases its Headquarters and branch office facilities.
Its  Headquarters, located at 2454 McMullen Booth Road, Building C  in
Clearwater, Florida, consists of approximately 4,500 square feet.  The
Company occupies the space pursuant to a lease that commenced on  July
1,  1995  and  expires on June 30, 2000. The current monthly  rent  is
$4,251,   with  annual  increases  of  approximately  2.25%  in   each
subsequent year of the lease. Management believes this office space is
adequate to meet its needs for the foreseeable future.

     Each of the Company's 14 branch offices consists of approximately
1,200 square feet. These offices are located in office parks, shopping
centers  or  strip malls and are occupied pursuant to leases  with  an
initial  term  of from two to five years at annual rates ranging  from
approximately $8.00 to $16.00 per square foot.


Item 3. Legal Proceedings

      The  Company  is  not  a  party to any  material  pending  legal
proceedings other than ordinary routine litigation incidental  to  its
business  none  of which, in the opinion of management,  will  have  a
material  effect  on  the Company's business,  financial  position  or
results of operations.

<PAGE> 11

Item 4. Submission of Matters to a Vote of Security Holders

     None

                               PART II


Item 5. Market for Common Equity and Related Stockholder Matters

      The  Company's common stock has been listed for trading  on  the
Vancouver  Stock  Exchange since 1987 under  the  symbol  "NFC.U".  On
August  21,  1997,  the  Board of Directors  passed  a  resolution  to
implement a one-for-three reverse split of the Company's common stock.
Effective  September  5,  1997, the Company's shareholders  of  record
owned one share of common stock for every three shares of common stock
owned prior to September 5, 1997. The purpose of the reverse split was
to  qualify  for  the  minimum share price required  by  the  National
Association  of  Security Dealers, ("NASD") for  inclusion  under  the
NASDAQ SmallCap System.  In September 1997, the Company applied to the
NASD  for approval to list its common stock on NASDAQ SmallCap System.
On December 23, 1997 the Company's NASDAQ application was approved and
trading  of  the Company's common stock commenced December  29,  1997,
under the symbol "NICKF". On February 17, 1998, the Board of Directors
passed  a Resolution removing the Company's common stock from  listing
on  the  Vancouver  Stock  Exchange. Effective  March  11,  1998,  the
Company's  common stock listing was removed from the  Vancouver  Stock
Exchange.

      Holders of Common Stock are entitled to receive dividends if and
when declared by the Board of Directors out of funds legally available
therefor.   It  has  been the Company's policy to retain  earnings  to
finance the growth of its business.  Accordingly, the Company has  not
issued  a cash dividend and has no plans to do so in the near  future.
As  of  March  31, 1999, there were approximately 500 stockholders  of
record of the Company's Common Stock.

      Effective  May 5,1999 the Company's NASDAQ stock symbol  changed
from "NICKF" to "NICK".

The  following  table reflects the high and low sale  prices  for  the
Company's  common stock on the Vancouver Stock Exchange for the  first
three quarters of fiscal 1998 and on NASDAQ for the fourth quarter and
for fiscal 1999.

<TABLE>
<CAPTION>

Price Range of Common Stock

<S>                                        <C>         <C>
Year ended March 31, 1999                   High        Low
     First Quarter ...........              $3.75       $2.88
     Second Quarter...........               3.25        2.13
     Third Quarter............               3.63        2.25
     Fourth Quarter............              4.38        3.00

Year ended March 31, 1998                   High        Low
     First Quarter ...........              $4.86       $3.60
     Second Quarter...........               5.10        3.70
     Third Quarter............               4.50        4.00
     Fourth Quarter............              4.50        2.75

</TABLE>
<PAGE> 12

Item  6.  Management's Discussion and Analysis of Financial  Condition
           and Results of Operations

Overview

     Consolidated net income increased in the fiscal year ended  March
31,  1999  to  $1,602,356 or $0.65 per diluted share from $913,690  or
$0.39  per  diluted  share in the fiscal year ended  March  31,  1998.
Earnings for the year were favorably impacted by significant growth in
the outstanding loan portfolio, improved portfolio performance and  an
improvement in the cost of funds.

The following table sets forth certain financial data:

<TABLE>
<CAPTION>
----------------------------------------------------------------------
                                              Years Ended March 31
                                               1999           1998
----------------------------------------------------------------------
<S>                                       <C>            <C>
Average Net Finance Receivables(1)         $43,578,531    $34,024,030

Average Indebtedness (2)                    27,923,366     21,898,605

Interest Income                              9,922,689      7,493,630

Interest Expense                             2,358,838      2,080,337

Net Interest Income                          7,563,851      5,413,293
----------------------------------------------------------------------
Gross Portfolio Yield (3)                       22.77%         22.02%

Average Cost of Borrowed Funds (2)               8.45%          9.50%

Net Interest Spread (4)                         14.32%         12.52%
----------------------------------------------------------------------
Net Portfolio Yield (3)                         17.36%         15.91%
----------------------------------------------------------------------
Write-off  to Liquidation                        7.93%          9.83%

Net Charge-Off Percentage                        6.84%          8.69%

<FOOTNOTE>

(1)Average  net  finance  receivables represent  the  average  of  net
  finance  receivables  throughout the year.  Net finance  receivables
  represents  gross  finance  receivables less  any  unearned  finance
  charges related to those receivables.

(2)Average  Indebtedness represents the average outstanding borrowings
  under  its  line  of  credit, subordinated debt and  notes  payable.
  Average  cost  of  borrowed  funds represents  interest  expense  as
  percentage of average indebtedness.

(3)Gross portfolio yield represents interest income as a percentage of
  average  finance  receivables.  Net portfolio yield  represents  net
  interest income as a percentage of average finance receivables.

(4)  Net interest spread represents the gross portfolio yield less the
  average cost of borrowed funds.

</TABLE>

<PAGE> 13

Fiscal 1999 compared to Fiscal 1998

Interest Income and Loan Portfolio

     Interest  income  on  finance receivables, predominantly  finance
charge income, increased 32% to $9.9 million in fiscal 1999 from  $7.5
million  in  fiscal 1998.  The net finance receivable balance  totaled
$39.9  million  at March 31, 1999, an increase of 23% from  the  $32.4
million  at  March  31,  1998.  The gross finance  receivable  balance
increased 27% to $63.4 million at March 31, 1999 from $50.1 million at
March 31, 1998. The primary reason interest revenue increased was  the
increase  in  the outstanding loan portfolio. The primary  reason  the
gross  portfolio  yield  increased  was  the  result  of  lower   than
anticipated write-off's on the existing portfolio. The primary  reason
net  finance  receivables increased was the opening of one  additional
office  and  the increased receivable base of several existing  branch
offices.

Computer Software Business

       In fiscal 1999, the revenues of NDS were $495,849 compared with
fiscal  1998 revenues of $443,392, an increase of 12%.  This  increase
was  primarily due to an increase in the installations of upgrades  to
existing customers, driven by the year 2000 issue during fiscal  1999.
Operating  income  for  fiscal  1999  was  $24,745  compared  with  an
operating income of $18,118 for fiscal 1998. The Company expects  both
operating  revenues  and income of NDS to remain stable,  although  no
assurance can be given in this regard.

Operating Expenses

     Operating  expenses  excluding provision for  credit  losses  and
interest  expense increased to $4.5 million in fiscal 1999  from  $3.5
million   in   fiscal  1998.  This  increase  of  29%  was   primarily
attributable to increasing the number of employees in several existing
branch   locations  and  also  increasing  the  number  of   corporate
personnel. The Company has increased its work force from 63  employees
at the end of fiscal 1998 to 71 employees at the end of fiscal 1999.

Interest Expense

     Interest  expense  increased to $2.4 million in  fiscal  1999  as
compared to $2.1 million in fiscal 1998. This increase was due  to  an
increase in average outstanding borrowings from $21.9 million to $27.9
million.  The effect of this increase was offset in part by a decrease
in  the  Company's effective average cost of borrowing from 9.50%  for
fiscal 1998 to 8.45% for fiscal 1999.

Analysis of Credit Losses

    Because of the nature of the borrowers under the Contracts and its
direct  consumer loan program, the Company considers the establishment
of  adequate reserves for credit losses to be imperative.  The Company
segregates  its  Contracts  into pools for  purposes  of  establishing
reserves  for losses.  Each such pool consists of the loans  purchased
by  a  Company branch office during a three month period.  The average
pool  consists  of  70 Contracts with an aggregate  initial  principal
amount  of  approximately $549,194. As of March 31, 1999, the  Company
had 192 active pools.

<PAGE> 14

     The  Company pools Contracts according to branch location because
the  branches  purchase  contracts in  different  markets  located  in
Florida  and  Georgia. All Contracts purchased by a  branch  during  a
fiscal  quarter comprise a pool. This method of pooling by branch  and
quarter allows the Company to evaluate the different markets where the
branches  operate. The pools also allow the Company  to  evaluate  the
different  levels of customer income, stability, credit  history,  and
the types of vehicles purchased in each market.

     A  pool  retains an amount equal to 100% of the discount  into  a
reserve  for  credit  losses.  In  situations  where ,  at the date of
purchase,the discount is determined to be insufficient to  absorb  all
potential losses  associated  with  the  pool,  a  portion  of  future
unearned  income associated   with that specific pool will be added to
the reserves  for credit  losses until total reserves have reached the
appropriate level. Subsequent  to  the  purchase, if the  reserve  for
credit losses  is  determined to be inadequate for a pool which is not
fully liquidated,   then  a  charge  to  income is used to reestablish
adequate  reserves.  If  a   pool  is  fully  liquidated  and  has any
remaining reserves, the excess reserves are recognized as income.

     In  analyzing  a pool, the Company considers the  performance  of
prior  pools originated by the branch office, the performance of prior
Contracts  purchased from the dealers whose Contracts are included  in
the  current  pool,  the  credit rating of  the  borrowers  under  the
Contracts  in  the  pool, and current market and economic  conditions.
Each  pool  is analyzed monthly to determine if the loss reserves  are
adequate  and  adjustments  are made if  they  are  determined  to  be
necessary.  As of March 31, 1999, the Company had established reserves
for  losses  on Contracts of $8,548,550 or 13.47% of gross outstanding
receivables under the Contracts.

<PAGE> 15

   The  following  tables  present certain information  regarding  the
delinquency rates experienced by the Company with respect to Contracts
and under its direct consumer loan program:

<TABLE>
<CAPTION>
                                      Year Ended         Year Ended
                                    March 31, 1999      March 31, 1998
                                  --------------------------------------
<S>                           <C>    <C>     <C>       <C> <C>      <C>
Contracts
Gross Balance Outstanding             $61,486,782           $48,960,601


                                Dollar                   Dollar
Delinquencies                   Amount      Percent      Amount    Percent
                               ---------   ---------    ---------  --------
30 to 59 days                 $1,404,387      2.28%    $1,785,309    3.65%
60 to 89 days                    307,239      0.50%       331,027    0.68%
90 + days                        155,271      0.25%        84,751    0.17%
                               ---------     ------     ---------   ------
Total Delinquencies           $1,866,897               $2,201,087

*Total Delinquencies as a
 percent of outstanding balance               3.03%                  4.50%



Direct Loans
Net Balance Outstanding                $1,535,707              $870,237

Delinquencies

30 to 59 days                      7,833      0.51%         3,950    0.45%
60 to 89 days                      9,749      0.63%         6,168    0.71%
90 + days                          4,807      0.31%         9,440    1.08%
                                --------     ------       -------   ------
Total Delinquencies              $22,389                  $19,558

Total Delinquencies as a
% of outstanding Balance                      1.45%                  2.24%

</TABLE>

The  provision  for  credit  losses was $940,922  in  fiscal  1999  as
compared to $848,641 in fiscal 1998. This was primarily the result  of
a  23%  increase  in  the net portfolio over last  year.  The  Company
increased  its  total reserve percentage from 12.25% of gross  finance
receivables  for fiscal year ended March 31, 1998 to  13.48%  for  the
fiscal year ended March 31, 1999. Management believes that the reserve
adjustments   made  during  fiscal  1999  are  consistent   with   its
conservative reserve methodology.


<PAGE> 16

Income Taxes

   The  provision  for income taxes in fiscal 1999  increased  72%  to
$1,003,242  from $583,957 in fiscal 1998 as a result of higher  pretax
income.   The  Company's effective tax rate decreased from  38.99%  in
fiscal 1998 to 38.50% in fiscal 1999.


Net Income

  As a result of the above factors, net income increased from $913,690
in fiscal 1998 to $1,602,356 in fiscal 1999.


Liquidity and Capital Resources

The  Company's cash flows for fiscal 1999 and 1998  are summarized  as
follows:

<TABLE>
<CAPTION>
                                      Fiscal         Fiscal
                                       1999           1998
                                    --------------------------
<S>                                 <C>           <C>
Cash provided by (used in):
  Operations                         $2,217,609    $2,057,317
  Investing activities -
  (primarily purchase of
   installment contracts)            (8,523,794)   (7,473,864)

  Financing activities                6,511,643     5,612,359
                                    --------------------------
Net increase in cash                   $205,458      $195,812
                                    ==========================

</TABLE>

      The  Company's primary use of working capital during fiscal year
1999 was the funding of the purchase of Contracts.  The Contracts were
financed substantially through borrowings on the Company's $35 million
line  of  credit.  The line of credit, which expires in June 2001,  is
secured primarily by Contracts, and available borrowings are based  on
a percentage of qualifying Contracts. As of March 31, 1999 the Company
had approximately $5 million available under the line of credit. Since
inception,  the  Company  has also funded a  portion  of  its  working
capital needs from cash flows from operating activities.

      The  self-liquidating nature of installment Contracts and  other
loans enables the Company to assume a higher debt-to-equity ratio than
in most businesses. The amount of debt the Company incurs from time to
time  under  these financing mechanisms depends on the Company's  need
for  cash  and it's ability to borrow under the terms of its  line  of
credit. The Company believes that borrowings available under the  line
of  credit as well as cash flow from operations and, if necessary, the
issuance  of additional subordinated debt and or additional securities
in  the  capital  markets, will be sufficient to meet its  short  term
funding needs.

<PAGE> 17

Impact of Inflation

      The  Company  is  affected by inflation primarily  by  increased
operating  costs  and expenses.  Inflationary pressures  on  operating
costs  and  expenses  have  been offset  by  the  Company's  continued
emphasis  on  stringent operating and cost controls and  to  a  lesser
extent  by  modest  increases  in  support  rates  from  its  software
subsidiary,  Nicholas  Data  Services. Management  believes  that  the
Company's  financial  position has enabled it to  negotiate  favorable
interest rates.

      The  Company  believes  that a downturn  in  the  economy  would
increase  the  number  of  purchasers  of  automobiles  financed  with
Contracts.  During a modest downturn in economic activity more  people
will experience a reduction in income because of downsizing, fewer and
smaller raises, and the necessity of accepting lower paying jobs.   In
addition,  it  may  be difficult for individuals who have  financially
over-extended themselves to meet their debt obligations and  they  may
find  it  necessary  to  purchase used rather  than  new  automobiles.
Although the number of potential customers can be expected to increase
during  periods of slow economic activity, the number of  defaults  in
payment  obligations can also be expected to increase with a resulting
increase in repossessions of vehicles securing Contracts.  The Company
is  not  able  to  predict whether or not the net  effect  of  such  a
downturn would be favorable or unfavorable to the operating results of
the  Company, although the Company believes that a severe downturn  in
economic  activities  would have a material effect  on  its  business,
financial condition and results of operations.


Future Expansion

      The  Company  intends  to  continue its  expansion  through  the
purchase  of  additional  Contracts and the expansion  of  its  direct
consumer loan program.  In order to increase the size of its portfolio
of  Contracts, it will be necessary for the Company to open additional
branch  offices and increase the size of its revolving line of  credit
arrangement,  either with its current lender or another  lender.   The
Company,  from time to time, has and will meet with private  investors
and   financial   institutions  that  specialize   in   investing   in
subordinated debt. The Company believes that the addition of more debt
that  is  subordinate to the line of credit will make it possible  for
the Company to continue to meet or exceed its covenants under the loan
agreement, increase the amount of funds drawn down under its  line  of
credit,  and  draw  down funds under the line at a faster  rate.   The
Company  also  intends to continue its policy of not paying  dividends
and  using  earnings  from operations to purchase  Contracts  or  make
direct  consumer  loans.  The Company believes  that  opportunity  for
growth continues to exist in Florida as well as Georgia and intends to
continue its expansion activities in those states. The Company is also
exploring  the  possibility of expanding into North  Carolina  and  or
South  Carolina; although the Company does not have any current  plans
to  do so. No assurances can be given that the Company will be able to
continue to expand its operations.


Year 2000

      The year 2000 Issue  is  the  result  of computer programs being
written  using  two digits rather than four to define  the  applicable
year.  Any  of the Company's computer programs or hardware  that  have
date-sensitive software or embedded chips may recognize a  date  using
"00" as the year 1900 rather than the year 2000. This could result  in
a system failure or miscalculations causing disruptions of operations,
including,  among  other  things,  a temporary  inability  to  process
transactions, send invoices, or engage in similar business activities.

<PAGE> 18

      The  Company's  plan  to  resolve  the  Year 2000 Issue involves
the  following  four  phases: assessment,  remediation,  testing,  and
implementation.  To  date,  the  Company  has  fully   completed   its
assessment of all systems that could be significantly affected by  the
Year  2000.  The  completed  assessment indicated  that  some  of  the
Company's significant information technology systems could be affected
including  the  Company's internally developed proprietary  accounting
application software which is the integral component of the  Financial
subsidiary's  data  processing systems and  the  Company's  commercial
application  software  which is sold through  the  Company's  software
subsidiary  NDS.  In  addition the Company has  identified  Year  2000
deficiencies  within its report-writer which the Company  utilizes  to
produce most of its internal accounting and operational reports.

      Based  on  recent  assessments  the  Company determined that  it
will  be  required to modify or replace significant  portions  of  its
software  and  certain  hardware so that those systems  will  properly
utilize dates beyond December 31, 1999. The Company presently believes
that  with  modifications  or replacements of  existing  software  and
certain  hardware, the Year 2000 Issue can be mitigated.  However,  if
such modifications and replacements are not completed timely, the Year
2000  Issue  could  have a material impact on the  operations  of  the
Company.

      For its information technology exposures, to date the Company is
90%  complete  on  the  remediation   phase  and  expects  to complete
software  reprogramming  and  replacement no later than July  1, 1999.
Once software is reprogrammed or replaced for  a  system,  the Company
begins testing and implementation. To date the  Company  has completed
80% of  its testing and has implemented 60% of its remediated systems.
Completion of  the  testing  phase  for  all  significant  systems  is
expected by July 1, 1999, with all remediated systems fully tested and
implemented  by  August  31, 1999, with 100%  completion  targeted for
September 30, 1999.

      The  remediation  of  operating  equipment  is not  a Year  2000
issue  with  the  Company because it has no operating  equipment  that
would be affected, therefore no testing is required.

      The   Company   has   queried   its  significant  suppliers  and
vendors  that  do not share information systems with the  Company.  To
date, the Company is not aware of any external agent with a Year  2000
issue   that   would  materially  impact  the  Company's  results   of
operations, liquidity, or capital resources. However, the Company  has
no means of ensuring that external agents will be Year 2000 ready. The
inability  of  external agents to complete their Year 2000  resolution
process  in a timely fashion could materially impact the Company.  The
effect of non-compliance by external agents is not determinable.

      The   Company   will   utilize   both   internal   and  external
resources  to reprogram, or replace, test, and implement the  software
and operating equipment for Year 2000 modifications. The total cost of
the  Year  2000  project is estimated at $25,000 and is  being  funded
through  operating  cash  flows. To date,  the  Company  has  incurred
approximately $15,000 related to all phases of the Year 2000  project.
The total remaining project costs are attributable to the purchase  of
new software and operating equipment, which will be capitalized.

           Management  of  the Company believes it  has  an  effective
program in place to resolve the Year 2000 issue in a timely manner. As
noted above, the Company has not yet completed all necessary phases of
the Year 2000 program. In the event that the Company does not complete
any  additional  phases,  the  Company  might  be  unable  to  invoice
customers,  collect payments or produce all the necessary  reports  to
operate effectively. In addition, disruptions in the economy generally
resulting from Year 2000 issues could also materially adversely affect
the  Company. The Company could be subject to litigation for  computer
systems  record  failure. The amount of potential liability  and  lost
revenue cannot be reasonably estimated at this time.

           The  Company currently has no contingency plan in place  in
the  event  it does not complete all phases of the Year 2000  program.
The  Company plans to evaluate the status of completion in  July  1999
and determine whether such a plan is necessary.

<PAGE> 19

Item 7. Financial Statements

The  following financial statements are filed as part of  this  report
(see pages 25-42)

  Report of Independent Auditors..............................24

  Audited Consolidated Financial Statements

  Consolidated Balance Sheets.................................25
  Consolidated Statements of Income and Retained Earnings.....26
  Consolidated Statements of Cash Flows.......................27
  Notes to the Consolidated Financial Statements..............28




Item  8.  Changes In and Disagreements with Accountants on  Accounting
           and Financial Disclosure

          None.

<PAGE> 20

                              PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons

     The information set forth under the caption "Proposal 1: Election
of  Directors" in the Proxy Statement and Information Statement, dated
on  or  about June 29, 1999, for the Annual General Meeting of Members
of  Nicholas Financial - Canada to be held August 4, 1999 (the  "Proxy
Statement"),  the  information set forth under the caption  "Executive
Officers and Compensation" in the Proxy Statement, and the information
set  forth  under  the  caption "Section 16 (a)  Beneficial  Ownership
Reporting  Compliance"  in  the Proxy Statement  are  incorporated  by
reference.

Additional information regarding the officers is set forth below.

      Peter  L.  Vosotas  is the founder of the Company  and  majority
stockholder  of Nicholas Financial-Canada.  He has served as  Chairman
of  the  Board,  Chief  Executive Officer and  President  of  Nicholas
Financial-Canada and each of its subsidiaries since formation.   Prior
to  forming  the  Company, Mr. Vosotas held a  variety  of  Sales  and
Marketing  positions with Ford Motor Company, GTE  and  AT&T  Paradyne
Corporation.  Mr Vosotas attended the United States Naval Academy  and
earned a Bachelor of Science Degree in Electrical Engineering from the
University of New Hampshire.

      As of March 31, 1999 there was one executive officer who was not
also  a  director of Nicholas Financial - Canada. Ralph T. Finkenbrink
has  served as Vice-President-Finance of Nicholas Financial  -  Canada
since  July  1997.  He  joined  the Company  in  1988  and  served  as
Controller of Nicholas Financial and NDS until 1992.  Prior to joining
the Company, he was a staff accountant for MBI, Inc. from January 1984
to  March 1985 and Inventory Control Manager for The Dress Barn,  Inc.
from  March  1985  to  December 1987.  Mr.  Finkenbrink  received  his
Bachelor  of  Science  Degree  in Accounting  from  Mount  St.  Mary's
University in Emmitsburg, Maryland.


Item 10. Executive Compensation

      The  information set forth under the caption "Executive Officers
and  Compensation"  in the Proxy Statement is incorporated  herein  by
reference.


<PAGE> 21

Item   11.  Security  Ownership  of  Certain  Beneficial  Owners   and
             Management

   The  information  set  forth  under the caption "Voting Shares  and
Ownership of Management and Principal Holder's" in the Proxy Statement
is incorporated herein by reference.

Item 12.  Certain Relationships and Related Transactions

   In April 1996, Dr. Ellis Hyman, a Director of Nicholas Financial  -
Canada and NDS, agreed to subordinate $200,000 of debt at 12% interest
with  semi-annual interest payments only. The entire principal balance
plus  accrued  interest is due on April 20, 2000. Dr.  Hyman  has  the
option of converting the note into common shares of the Company  at  a
price of $5.00 per share.

   In January 1998, Dr. Hyman, also agreed to subordinate $150,000  of
debt at 12% interest with quarterly interest payments only. The entire
principal  balance plus accrued interest is due on January  26,  2000.
Dr. Hyman has the option of converting the note into common shares  of
the Company at a price of $8.25 per share.

  In February 1998, Stephen Bragin, a Director of Nicholas Financial -
Canada and NDS, agreed to subordinate $150,000 of debt at 12% interest
with  semi-annual interest payments only. The entire principal balance
plus accrued interest is due on February 28, 2000. Mr. Bragin has  the
option of converting the note into common shares of the Company  at  a
price of $5.00 per share.

<PAGE> 22

Item 13. Exhibits and Reports on Form 8-K


       (a)  Exhibits


3.1    Articles of Incorporation of Nicholas Financial, Inc. and
       By-Laws

       Incorporated by reference to the Company's Form 10-SB. File
       No. 0-26680

4.1    Stock Certificate

       Incorporated by reference to Exhibit 4.1 to the Company's
       Form 10-SB (File No. 0-26680)

10.1.1 Loan and Security Agreement dated March 31, 1993  between
       BA Business Credit, Inc. and Nicholas Financial, Inc.

       Incorporated by reference to Exhibit 10.1.1 to the Company's
       Form 10-SB (File No. 0-26680)

10.1.2 Loan Modification Agreement dated January 14, 1994

       Incorporated by reference to Exhibit 10.1.2 to the Company's
       Form 10-SB (File No. 0-26680)

10.1.3 Temporary Line Increase Agreement dated Mach 28, 1994

       Incorporated by reference to Exhibit 10.1.3 to the Company's
       Form 10-SB (File No. 0-26680)

10.1.4 Second Loan Modification Agreement dated June 3, 1994

       Incorporated by reference to Exhibit 10.1.4 to the Company's
       Form 10-SB (File No. 0-26680)

10.1.5 Amendment No. 3 to Loan Agreement dated July 5, 1994

       Incorporated by reference to Exhibit 10.1.5 to the Company's
       Form 10-SB (File No. 0-26680)

10.1.6 Amendment No. 4 to Loan Agreement and Security Agreement

       Incorporated by reference to Exhibit 10.1.6 to the Company's
       Form 10-SB (File No. 0-26680)

10.1.7 Fifth Loan Modification Agreement dated July 13, 1995

       Incorporated by reference to Exhibit 10.1.7 to the Company's
       Form 10-KSB for the fiscal year ended March 31, 1996

10.1.8 Sixth Loan Modification Agreement dated May 13, 1996

       Incorporated by reference to Exhibit 10.1.8 to the Company's
       Form 10-QSB for the three months ended June 30, 1996

<PAGE> 23

10.1.9 Amendment No. 7 to Loan and Security Agreement dated July 5,
       1997

       Incorporated by reference to Exhibit 10.1.9 to the Company's
       Form 10-QSB for the three months ended September 30, 1997

10.2.0  Amendment No. 8 to Loan and Security Agreement dated
        September 18, 1998

        Incorporated by reference to Exhibit 10.2.0 to the Company's
        Form 10-QSB for the three months ended September 30, 1998

10.2.1  Amendment No. 9 to Loan and Security Agreement dated
        November 25, 1998

        Incorporated by reference to Exhibit 10.2.1 to the Company's
        Form 10-QSB for the three months ended December 31, 1998

23      Powers of Attorney (included on signature page hereto)

27      Financial Data Schedule (for SEC use only)

       (b)  Reports on Form 8-K
            None


<PAGE>

                              SIGNATURES

     In accordance with Section 13 or 15(d) of the Securities Exchange
Act  of  1934, the Registrant has duly caused this Report to be signed
on its behalf by the undersigned thereunto duly authorized.

                                   NICHOLAS FINANCIAL, INC.


Dated: June 28, 1999
                                  By:/s/ Peter L. Vosotas
                                     ----------------------------
                                     Peter L. Vosotas
                                     Chairman, Chief Executive Officer
                                     and President

      KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears  below constitutes and appoints Peter L. Vosotas and Ralph  T.
Finkenbrink, and each of them, his or her true and lawful attorneys-in-
fact  and  agents, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities, to sign any and all amendments to this report, and to file
the  same,  with  all  exhibits thereto, and any  other  documents  in
connection  therewith,  with the Securities and  Exchange  Commission,
granting  unto  said attorneys-in-fact and agents, and each  of  them,
full  power  and  authority to perform each and every  act  and  thing
requisite and necessary to be done in and about the premises, as fully
to  all intents and purposes as he or she might or could do in person,
hereby  ratifying  and  confirming all that said attorney-in-fact  and
agents  or  either of them, or their substitutes, may lawfully  do  or
cause to be done by virtue hereof.

      In  accordance with the Securities Exchange Act  of  1934,  this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.


Signature                Title                       Date
----------               -------                     -------
                         Chairman of the Board,
                         Chief Executive Officer,
/s/Peter L Vosotas       President and Director      June 28, 1999
-------------------
Peter L. Vosotas


/s/ Ralph T Finkenbrink  Vice President - Finance    June 28, 1999
------------------------ (Principal Financial
Ralph T. Finkenbrink      Officer)


/s/ Ellis P Hyman        Director                    June 28, 1999
------------------
Ellis P. Hyman


/s/ Stephen Bragin       Director                    June 28, 1999
-------------------
Stephen Bragin


/s/William Taylor        Director                    June 28, 1999
-------------------
William Taylor

<PAGE> 24

                 Report of Independent Auditors

To the Board of Directors of
Nicholas Financial, Inc.

We have audited the accompanying consolidated balance sheets of
Nicholas Financial, Inc. as of March 31, 1999 and 1998, and the
related consolidated statements of income and retained earnings
and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated
financial position of Nicholas Financial, Inc. at March 31, 1999
and 1998, and the consolidated results of its operations and its
cash flows for the years then ended in conformity with generally
accepted accounting principles.

                                               Ernst & Young LLP

May 7, 1999
Tampa, Florida

<PAGE> 25
<TABLE>
<CAPTION>

                    Nicholas Financial, Inc.
                   Consolidated Balance Sheets


                                                    March 31
                                                1999        1998
                                           ------------------------
<S>                                       <C>          <C>
Assets
Cash                                       $   509,418  $   303,960
Finance receivables, net                    39,923,471   32,424,411
Accounts receivable                             22,932       23,405
Prepaid expenses and other assets              308,844      246,845
Property and equipment, net                    217,293      223,486
Deferred income taxes                        1,275,056      950,778
                                           ------------------------
Total assets                               $42,257,014  $34,172,885

Liabilities and Shareholders' Equity
Line of credit                             $29,964,549  $23,430,594
Notes payable-related party                  1,606,765    1,591,595
Accounts payable                             1,735,356    1,742,458
Income taxes payable                                 -      169,882
Deferred revenues                              387,944      241,129
Other liabilities                               21,699       21,400
                                           ------------------------
                                            33,716,313   27,197,058

Shareholders' equity
Preferred stock, no par: 5,000,000
 shares authorized; none issued and
 outstanding                                         -            -
Common stock, no par: 50,000,000 shares
 authorized; 2,349,108 and 2,357,013 shares
 issued and outstanding, respectively        3,702,587    3,740,069
Retained earnings                            4,838,114    3,235,758
                                            -----------------------
                                             8,540,701    6,975,827
                                            -----------------------
Total liabilities and
 shareholders' equity                      $42,257,014  $34,172,885
                                            =======================
</TABLE>

See accompanying notes.

<PAGE> 26
<TABLE>
<CAPTION>

                    Nicholas Financial, Inc.
     Consolidated Statements of Income and Retained Earnings


                                              Year ended March 31
                                                1999        1998
                                             -----------------------
<S>                                         <C>          <C>
Revenue:
 Interest income on finance receivables      $9,922,689   $7,493,630
 Sales                                          495,849      443,392
                                             -----------------------
                                             10,418,538    7,937,022
Expenses:
 Cost of sales                                  102,368      105,924
 Marketing                                      369,968      319,757
 Administrative                               3,950,839    3,001,958
 Provision for credit losses                    940,922      848,641
 Depreciation                                    90,005       82,758
 Interest expense                             2,358,838    2,080,337
                                              ----------------------
                                              7,812,940    6,439,375
                                              ----------------------
Operating income before income taxes          2,605,598    1,497,647

Income tax expense (benefit):
 Current                                      1,327,520    1,123,368
 Deferred                                      (324,278)    (539,411)
                                              ----------------------
                                              1,003,242      583,957
                                              ----------------------
Net income                                    1,602,356      913,690

Retained earnings, beginning of year          3,235,758    2,322,068
                                              ----------------------
Retained earnings, end of year               $4,838,114   $3,235,758
                                              ======================
Earnings per share:
     Basic                                         $.68         $.39
                                              ======================
     Diluted                                       $.65         $.39
                                              ======================

Weighted average shares - basic               2,357,984    2,366,917
                                              ======================
Weighted average shares - diluted             2,622,782    2,616,452
                                              ======================
</TABLE>

See accompanying notes.

<PAGE> 27
<TABLE>
<CAPTION>

                    Nicholas Financial, Inc.
              Consolidated Statements of Cash Flows


                                                 Year ended March 31
                                                  1999         1998
                                              ------------------------
<S>                                          <C>           <C>
Cash flows from operating activities
Net income                                    $ 1,602,356   $  913,690
Adjustments to reconcile net income
 to net cash flows provided
 by operating activities:
  Depreciation                                     90,005       82,758
  Provision for credit losses                     940,922      848,641
  Deferred income taxes                          (324,278)    (539,411)
  Changes in operating assets and
   liabilities:
   Accounts receivable                                473        8,819
   Prepaid expenses and other assets              (61,999)     116,726
   Deferred revenues                              146,815       67,115
   Accounts payable                                (7,102)     468,434
   Other liabilities                                  299       (6,410)
   Income taxes payable                          (169,882)      96,955
                                              ------------------------
Net cash provided by operating activities       2,217,609    2,057,317

Investing activities
Increase in finance receivables, net of
principal collected                            (8,439,982)  (7,349,961)
Purchase of property and equipment, net of
disposals                                         (83,812)    (123,903)
                                              ------------------------
Net cash used by investing activities          (8,523,794)  (7,473,864)

Financing activities
Proceeds (repayment) of notes payable
 -related party                                    15,170     (164,500)
Net proceeds from line of credit                6,533,955    5,750,000
Sale (repurchase) of  common stock                (37,482)      26,859
                                              ------------------------
Net cash provided by financing activities       6,511,643    5,612,359
                                              ------------------------
Net increase in cash                              205,458      195,812
Cash, beginning of year                           303,960      108,148
                                              ------------------------
Cash, end of year                                $509,418     $303,960
                                              ========================

</TABLE>

See accompanying notes.

<PAGE> 28

                    Nicholas Financial, Inc.
         Notes to the Consolidated Financial Statements
                         March 31, 1999


1. Organization

Nicholas Financial, Inc. (NFI, Canada) is a Canadian holding
company incorporated under the laws of British Columbia with two
wholly-owned United States subsidiaries, Nicholas Data Services,
Inc. (NDSI) and Nicholas Financial, Inc. (NFI). NDSI is engaged
principally in the development, marketing and support of computer
application software. NFI is engaged principally in providing
installment sales financing. Both NDSI and NFI are based in
Florida, U.S.A. The accompanying financial statements are stated
in U.S. dollars.

2. Accounting Policies

Consolidation

The consolidated financial statements include the accounts of
NFI, Canada and its wholly-owned subsidiaries, NDSI and NFI,
collectively referred to as the Company. All intercompany
transactions and balances have been eliminated.

Property and Equipment

Property and equipment are recorded at cost. Expenditures for
repairs and maintenance are charged to expense as incurred.
Depreciation of property and equipment is computed using the
straight-line method over the estimated useful lives of the
assets as follows:

          Automotive                            3 years
          Equipment                             5 years
          Furniture and fixtures                7 years
          Leasehold improvements             Lease term

<PAGE> 29

                    Nicholas Financial, Inc.
   Notes to the Consolidated Financial Statements (continued)


2. Accounting Policies (continued)

Allowance for Loan Losses

The allowance for loan losses is increased by charges against
earnings and decreased by charge-offs (net of recoveries). In
addition to the allowance for loan losses, a nonrefundable dealer
reserve has been established using unearned interest and dealer
discounts to absorb future credit losses. To the extent actual
credit losses exceed these reserves, a bad debt provision is
recorded and to the extent credit losses are less than the
reserve, the reserve is accreted into income as an adjustment to
the interest yield over the term of the underlying finance
receivables.

Management's periodic evaluation of the adequacy of the allowance
is based on the Company's past loan experience, known and
inherent risks in the portfolio, adverse situations that may
affect the borrower's ability to repay, the estimated value of
any underlying collateral, and current economic conditions.


Income Taxes

Income taxes are accounted for under the asset and liability
method. Deferred tax assets and liabilities are recognized for
the future tax consequences attributable to differences between
the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases and operating loss and
tax credit carryforwards. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rate is recognized in
income in the period that includes the enactment date.

<PAGE> 30

                    Nicholas Financial, Inc.
   Notes to the Consolidated Financial Statements (continued)


2. Accounting Policies (continued)

Revenue Recognition

Revenues resulting from the sale of hardware and software are
recognized upon delivery of the products. Revenues from software
support maintenance and lease agreements are recognized over the
life of the agreements. The unamortized amounts are included in
the caption "deferred revenues."

Interest income on finance receivables is recognized using the
interest method. Accrual of interest income on finance
receivables is suspended when a loan is contractually delinquent
for 60 days or more or the collateral is repossessed, whichever
is earlier.

Earnings Per Share

Basic earnings per share excludes any dilutive effects of common
stock equivalents such as options, warrants, and convertible
securities. Diluted earnings per share includes the effects of
dilutive options, warrants, and convertible securities. Basic and
diluted earnings per share have been computed as follows:

<PAGE> 31

                    Nicholas Financial, Inc.
   Notes to the Consolidated Financial Statements (continued)


2. Accounting Policies (continued)

<TABLE>
<CAPTION>


                                           Year ended March 31
                                            1999         1998
                                         -----------------------
<S>                                     <C>           <C>
Numerator:

 Numerator for basic earnings per
  share - Net income available to
  common stockholders                    $1,602,356    $913,690
 Effect of dilutive securities:
  convertible debt                           99,636      99,636
 Numerator  for dilutive  earnings
  per share - income available  to
  common stockholders after assumed      -----------------------
  conversions                            $1,701,992  $1,013,626
                                         =======================
Denominator:
 Denominator for basic earnings per
  share - weighted average shares         2,357,984   2,366,917
 Effect of dilutive securities: (A)
  Employee stock options                          -       6,959
  Convertible debt                          264,798     242,576
                                         -----------------------
 Denominator for diluted earnings
  per share- adjusted weighted-
  average shares and assumed
  conversions                             2,622,782   2,616,452
                                         =======================
Earnings per share - basic                    $0.68       $0.39
                                         =======================
Earnings per share - diluted                  $0.65       $0.39
                                         =======================

Footnote A:
    Options                                 215,200      87,293
    Warrants                                333,333     333,333
    The options and warrants above were
outstanding  but  not included  in  the
computation  of  diluted  earnings  per
share  because  the  effect  would   be
antidilutive.

</TABLE>
<PAGE> 32

                    Nicholas Financial, Inc.
   Notes to the Consolidated Financial Statements (continued)


2. Accounting Policies (continued)

Stock Option Accounting

The Company has elected to follow Accounting Principles Board
Opinion No. 25, "Accounting for Stock Issued to Employees" (APB
25) and related interpretations in accounting for its stock
option grants and to present the disclosure requirements relating
to stock-based compensation plans required by Financial
Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" (FAS 123).

Financial Instruments

The Company's financial instruments consist of finance
receivables, accounts receivable, line of credit, notes
payable-related party and accounts payable. For each of these
financial instruments, the carrying value approximates its fair
value.

The Company's financial instruments that are exposed to
concentrations of credit risk are primarily finance receivables,
which are concentrated in the States of Florida and Georgia. The
Company provides credit in the normal course of business and
performs ongoing credit evaluations of it customers. The Company
maintains allowances for potential credit losses which, when
realized, have been within the range of management's
expectations. The Company perfects a primary security interest in
all vehicles financed as a form of collateral.

Use of Estimates

The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported
in the financial statements and accompanying notes. Actual
results could differ from those estimates.

Statement of Cash Flows

Cash paid for income taxes for the years ended March 31, 1999 and
1998 was $1,550,316 and $1,026,413 respectively. Cash paid for
interest for the years ended March 31, 1999 and 1998 was
$2,322,178 and $2,052,742, respectively.

<PAGE> 33


                    Nicholas Financial, Inc.
   Notes to the Consolidated Financial Statements (continued)


2. Accounting Policies (continued)

Recent Accounting Pronouncements

In 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards 130, "Reporting
Comprehensive Income." Statement 130 establishes standards for
reporting and display of comprehensive income and its components
in financial statements. Comprehensive income, as defined, is the
change in equity of a business enterprise during a period from
transactions and other events and circumstances from non-owner
sources. The Company adopted the provisions of Statement 130
effective April 1, 1998, and the adoption of Statement 130 did
not have an impact on the Company's results of operations or
financial position.

In June 1997, the FASB issued Statement of Financial Accounting
Standards 131, "Disclosures about Segments of an Enterprises and
Related Information." Statement 131 establishes standards for
segment reporting and disclosure of additional information on
products and services, geographic areas, and major customers. The
Company adopted the provisions of Statement 131 effective April
1, 1998, and has made the required disclosures in Note 11. There
was no financial impact from the adoption of Statement 131which
requires disclosures only.

In June 1998, the Financial Accounting Standards Board issued
Statement No. 133 (the "Statement"), Accounting of Derivative
Instruments and Hedging Activities. The Company expects to adopt
the new statement effective April 1, 2001. The Statement will
require the Company to recognize all derivatives on the balance
sheet at fair value. The Company does not anticipate that the
adoption of the Statement will have a significant effect on its
results of operations or financial position.

<PAGE> 34

                    Nicholas Financial, Inc.
   Notes to the Consolidated Financial Statements (continued)


3. Finance Receivables

Finance receivables consist of consumer automobile finance
installment contracts and are detailed as follows:

<TABLE>
<CAPTION>

                                          1999           1998
                                     -----------------------------
 <S>                                  <C>            <C>
  Finance receivables,
   gross contract                      $63,439,200    $50,110,571
     Less:
     Unearned interest                 (14,967,179)   (11,549,020)
                                     -----------------------------
                                        48,472,021     38,561,551

     Nonrefundable dealer reserve       (6,643,593)    (4,525,034)
     Allowance for credit losses        (1,904,957)    (1,612,106)
                                     -----------------------------
     Finance receivables, net          $39,923,471    $32,424,411
                                     =============================
</TABLE>

The terms of the receivables range from 6 to 60 months and bear a
weighted average effective interest rate of 24% for 1999 and
1998.

The following table sets forth a reconciliation of the changes in
nonrefundable dealer reserves for the years ended March 31.

<TABLE>
<CAPTION>
                                           1999          1998
                                     -----------------------------
<S>                                   <C>            <C>
Balance at beginning of year           $4,525,034     $3,253,513
Discounts acquired on new volume        5,330,351      4,408,114
Recoveries                                269,151        224,553
Accreted to income                       (724,520)      (505,665)
Losses absorbed                        (2,756,423)    (2,855,481)
                                     -----------------------------
Balance at end of year                 $6,643,593     $4,525,034
                                     =============================
Reserve as a percent of gross
finance receivables                        10.47%          9.05%
                                     =============================
</TABLE>
<PAGE> 35
                    Nicholas Financial, Inc.
   Notes to the Consolidated Financial Statements (continued)


3. Finance Receivables (continued)

The following table sets forth a reconciliation of the changes in
the allowance for doubtful accounts for the years ended March 31.

<TABLE>
<CAPTION>
                                         1999           1998
                                     -----------------------------
<S>                                  <C>             <C>
Balance at beginning of year          $1,612,106      $1,175,718
Current year provision                   940,922         848,641
Losses absorbed                         (648,071)       (412,253)
                                      ----------------------------
Balance at end of year                $1,904,957      $1,612,106
                                     =============================
Reserve as a percent of gross
 finance receivables                       3.00%           3.22%
                                     =============================

</TABLE>

4. Property and Equipment

<TABLE>
<CAPTION>
                                        Accumulated     Net Book
                              Cost      Depreciation      Value
                           ---------------------------------------
    <S>                     <C>           <C>           <C>
     1999
     Automotive              $45,664       $13,466       $32,198
     Equipment               276,476       160,463       116,013
     Furniture and
      fixtures               117,596        72,660        44,936
     Leasehold
      improvements            92,643        68,497        24,146
                           ---------------------------------------
                            $532,379      $315,086      $217,293
                           =======================================

     1998
     Automotive             $114,912       $79,403      $35,509
     Equipment               323,346       195,054      128,292
     Furniture and
      fixtures               108,023        61,296       46,727
     Leasehold
      improvements            70,002        57,044       12,958
                           ---------------------------------------
                            $616,283      $392,797     $223,486
                           =======================================

</TABLE>
<PAGE> 36

                    Nicholas Financial, Inc.
   Notes to the Consolidated Financial Statements (continued)


5. Line of Credit

The Company has a $35,000,000 line of credit facility (the Line)
which expires on June 30, 2001. Borrowings under the Line bear
interest at the prime rate or several Libor options plus 225
basis points. The Company's effective rate of interest at March
31, 1999 was 7.34%. Pledged as collateral for this credit
facility are all of the assets of Nicholas Financial Inc. and its
subsidiaries.


6. Notes Payable-Related Party

Notes payable to shareholders, directors and individuals related
thereto are as follows:

<TABLE>
<CAPTION>
                                                       March 31
                                                  1999          1998
                                              --------------------------
    <S>                                        <C>          <C>
     Notes payable, due through January
     2002, unsecured, subordinated to the
     Line, with interest at varying rates
     up to 12%, quarterly and semiannual
     interest payments due through January
     2002. The notes are convertible at the
     option of the holder, into common shares
     at prices from $4.50 to $6.00 per share.   $1,150,000   $1,150,000

     Notes payable, unsecured interest at
     12%, quarterly interest due through
     April 2000, at which time the entire
     principal balance and unpaid interest
     is due, subordinated to the Line. The
     note is convertible at the option of
     the holder, into common shares at
     $8.25 per share.                              200,000      200,000

     Note payable, unsecured, interest at
     12%, principal and interest due
     through March 2000.                           249,211      218,841

     Note payable, unsecured, interest at
     12%, quarterly interest due through
     August 1999, at which time the entire
     principal balance is due.                       7,554       22,754
                                              --------------------------
                                                $1,606,765   $1,591,595
                                              ==========================

</TABLE>
<PAGE> 37

                    Nicholas Financial, Inc.
   Notes to the Consolidated Financial Statements (continued)


6. Notes Payable-Related Party (continued)

Maturities of notes payable are summarized as follows:

<TABLE>
<CAPTION>

     Year ending March 31
    ----------------------
    <S>                                       <C>
     2000                                      $  556,765
     2001                                         200,000
     2002                                         850,000
                                                -----------
                                               $1,606,765
</TABLE>

The company incurred interest expense on the above notes of
$200,140 and $210,784 for the years ended March 31, 1999 and
1998, respectively.


7. Income Taxes

The provision for income taxes reflects an effective U.S tax rate
which differs from the corporate tax rate (34%) for the following
reasons:

<TABLE>
<CAPTION>

                                               1999      1998
                                           ----------------------
 <S>                                      <C>          <C>
  Provision for income taxes at Federal
  statutory rate                             $885,903   $509,200
  Increase resulting from:
  State income taxes, net of Federal
   benefit                                    117,252     67,394
  Other                                            87      7,363
                                           ----------------------
                                           $1,003,242  $ 583,957
                                           ======================
</TABLE>
<PAGE> 38

                    Nicholas Financial, Inc.
   Notes to the Consolidated Financial Statements (continued)


7. Income Taxes (continued)

The Company's deferred tax assets consist of the following as of:

<TABLE>
<CAPTION>
                                                      March 31
                                                   1999        1998
                                              ------------------------
 <S>                                          <C>           <C>
  Allowance for credit losses not deductible
   for tax purposes                             $1,056,988    $760,307
  Deferred compensation related to stock
   options and warrants                            157,000     157,000
   Other items                                      61,068      33,471
                                              -------------------------
                                                $1,275,056    $950,778
                                              =========================
</TABLE>

NFI, Canada has income tax loss carryforward balances of
approximately Cdn$180,000 (1998-Cdn$256,000) which are available
to reduce future taxable income and which expire thru 2006:

For the years ended March 31, 1999 and 1998, the Company would
have recorded deferred tax assets of approximately $82,000, due
primarily to these Canadian income tax loss carryforwards. The
assets, however, are offset entirely by a valuation allowance due
to the uncertainty surrounding the realization of the assets.

<PAGE> 39

                     Nicholas Financial, Inc.
   Notes to the Consolidated Financial Statements (continued)


8. Shareholders' Equity

Changes in the outstanding common stock during the years are as
follows:

<TABLE>
<CAPTION>

                                              Number    Common
                                                Of       Stock
                                              Shares
                                          -------------------------
<S>                                        <C>         <C>
Balance at March 31, 1997                   2,330,182   $3,713,210

Changes in 1998:
  Issued for cash upon exercise
    of options                                 26,831       59,343
                                          -------------------------
                                            2,357,013    3,772,553

Less account receivable from
 shareholders related  to
 exercise of options                                -       32,484
                                          -------------------------
Balance at March 31, 1998                   2,357,013   $3,740,069
                                          -------------------------

Changes in 1999:
 Issued in connection with
  employee bonus plan                           6,595       21,444
 Shares repurchased                           (14,500)     (58,926)
                                          -------------------------
Balance at March 31, 1999                   2,349,108   $3,702,587
                                          =========================
</TABLE>

The Company has a warrant outstanding entitling a director to
purchase 333,333 common shares at $5.07 (U.S.) until June 3,
1999.  At March 31, 1999, the warrant was fully exercisable.

<PAGE> 40

                    Nicholas Financial, Inc.
   Notes to the Consolidated Financial Statements (continued)


8. Shareholders' Equity (continued)

The Company has an employee stock incentive plan (the SIP) for
officers, directors and key employees under which 215,200 shares
of common stock were reserved for issuance as of March 31, 1999.
Options currently granted by the Company generally vest over a
five year period.

The Company has elected to follow APB 25 and related
Interpretations in accounting for its employee stock options
because, as discussed below, the alternative fair value
accounting provided for under FAS 123, requires use of option
valuation models that were not developed for use in valuing
employee stock options. Under APB 25, if the exercise price of
the Company's employee stock options equals the market price of
the underlying stock on the date of grant, no compensation
expense is recognized.

Pro forma information regarding net income and earnings per share
as required by FAS 123 has been determined as if the Company has
accounted for its employee stock options and warrants granted
subsequent to December 31, 1994 under the fair value method of
that Statement. The fair value for these options and warrants was
estimated at the date of grant using a Black-Scholes option
pricing model with the following weighted-average assumptions for
1999 and 1998;

<TABLE>
<CAPTION>
                                    1999      1998
                                  -------------------
<S>                                <C>       <C>
Risk free rate of return            5.38%     5.75%
Volatility factor                   0.531     0.400
Expected life                     5 years   5 years
Expected dividends                   None      None

</TABLE>

The Black-Scholes option valuation model was developed for use in
estimating the fair value of traded options which have no vesting
restrictions and are fully transferable. In addition, option
valuations models require the input of highly subjective
assumptions including the expected stock price volatility.
Because the Company's employee stock options and warrants have
characteristics significantly different from those of traded
options and warrants, and because changes in the subjective input
assumptions can materially effect the fair value estimate, in
management's opinion, the existing models do not necessarily
provide a reliable single measure of the fair value of its
employee stock options and warrants.

<PAGE> 41

                    Nicholas Financial, Inc.
   Notes to the Consolidated Financial Statements (continued)


8. Shareholders' Equity (continued)

For purposes of pro forma disclosures, the estimated fair value
of the options and warrants is amortized to expense over the
option and warrant's vesting period. The Company's pro forma
information follows:

<TABLE>
<CAPTION>
                                      1999        1998
                                  -----------------------
<S>                               <C>          <C>
Pro forma net income               $1,553,839   $878,092
Pro forma earnings per share:
  Basic                                  $.66       $.38
  Diluted                                $.63       $.37

</TABLE>

The following table reflects activity within the SIP for the
years noted:

<TABLE>
<CAPTION>

                                  1999                     1998
                                 ------                   ------
                                       Weighted                Weighted
                           Options      Average    Options      Average
                              &        Exercise       &        Exercise
                           Warrants      Price     Warrants      Price
                         ------------------------------------------------
<S>                       <C>           <C>       <C>           <C>
Outstanding-beginning
 of year                   468,120       $5.00     480,667       $5.13
Granted                    258,200        3.40     102,294        4.38
Exercised                        -           -     (26,831)       2.21
Canceled/expired          (177,787)       3.92     (88,010)       4.87
                          ---------               ---------
Outstanding- end of
year                       548,533        4.42     468,120        5.00
                          =========               =========
Exercisable at end
of year                    333,333        5.07     391,994        5.15
                          =========               =========
Weighted-average fair
 value of options
 granted during
 the year                                $1.63                   $1.73

</TABLE>
<PAGE> 42

                    Nicholas Financial, Inc.
   Notes to the Consolidated Financial Statements (continued)


8. Shareholders' Equity (continued)

<TABLE>
<CAPTION>
                                     Weighted     Currently Exercisable
                          Weighted    Average                    Weighted
                           Average   Remaining                    Average
Exercise                  Exercise  Contractual                  Exercise
  Price         Shares      Price      Life          Shares        Price
--------------------------------------------------------------------------
<C>           <C>         <C>        <C>            <C>          <C>
$3.00 to 3.99  215,200     $3.40      4.19 years           -          -
 5.00 to 5.07  333,333     $5.07      0.18 years     333,333      $5.07
--------------------------------------------------------------------------
    Total      548,533     $4.42      1.75 years     333,333      $5.07

</TABLE>

9. Employee Benefit Plans

The Company has a 401(k) profit sharing plan under which all
employees are eligible to participate. Employee contributions are
voluntary and subject to Internal Revenue Service limitations.
The Company matches, based on annually determined factors,
employee contributions provided the employee completes certain
levels of service annually. For 1999 and 1998, the Company,
recorded expenses of $17,296 and $15,153, respectively, related
to this plan.

10. Commitments

The Company leases its corporate office and sales offices under
operating lease agreements. For leases with a remaining term of
one year or more, the annual minimum rental payments are as
follows:

<TABLE>
<CAPTION>

     Year ending March 31
    <S>                                          <C>
     2000                                         $182,145
     2001                                          104,579
     2002                                           61,005
     2003                                           43,994
     2004 and thereafter                            41,220
                                                  --------
     Total                                        $432,943

</TABLE>

Rent expense for the years ended March 31, 1999 and 1998 was
$217,192 and $174,526, respectively.

<PAGE> 43
                    Nicholas Financial, Inc.
   Notes to the Consolidated Financial Statements (continued)



11. Segment Information

The segments presented have been identified based on the
difference in the products and services of the Company's two
wholly-owned subsidiaries. Internal financial results for each
subsidiary are presented to and reviewed by the senior management
of the Company. Substantially all of the Company's operations are
in the United States. The industry segments are as follows:

<TABLE>
<CAPTION>

                                         Computer
                                        Application
                              General    Software &
                              Financing   Support     Corporate      Total
                             -----------------------------------------------
<S>                         <C>          <C>         <C>        <C>
 1999
 Interest income and sales   $9,922,689   $495,849    $      -   $10,418,538
 Operating income before
  income taxes                2,580,853     24,745           -     2,605,598
 Income tax expense             993,714      9,528           -     1,003,242
 Identifiable assets         42,073,291    179,849       3,874    42,257,014
 Capital expenditures            83,812          -           -        83,812
 Depreciation and
  amortization                   86,430      3,575           -        90,005

 1998
 Interest income and sales   $7,493,630   $443,392    $      -    $7,937,022
 Operating income (loss)
  before income taxes         1,506,266     18,118     (26,737)    1,497,647
 Income tax expense             576,892      7,065           -       583,957
 Identifiable assets         34,000,507    169,938       2,440    34,172,885
 Capital expenditures           123,903          -           -       123,903
 Depreciation and
  amortization                   67,764     14,994           -        82,758

</TABLE>
<PAGE> 44

12. Subsequent Events

For hedging purposes the Company uses interest rate swap
agreements to fix interest rates on variable rate debt and reduce
certain exposures to interest rate fluctuations. The agreements
involve the exchange of amounts based on a variable interest rate
for amounts based on fixed interest rates over the life of the
agreement, without an exchange of the notional amount upon which
the payments are based. The differential to be paid or received
as interest rates change is accrued and recognized as an
adjustment of interest expense related to the debt. The fair
value of the swap agreements are not recognized in the financial
statements. Neither the Company nor the counterparties, which are
prominent financial institutions, are required to collateralize
their respective obligations under these swaps. The Company does
not believe that any reasonable likely change in interest rates
would have a material adverse effect on the financial position,
the results of operations or cash flow of the Company.


On May 11, 1999 the Company entered into a interest rate swap
with a notional amount of $10 million at a fixed rate of 5.81%,
maturing on May 24, 2002. On May 21, 1999 the Company entered
into two interest rate swaps with notional amounts of $5 million
each, at fixed rates of 5.81% and 6.08%, maturing on May 24, 2001
and May 24, 2004, respectively.