<PAGE> 1

         UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                       Washington, DC  20549

                            FORM 10-QSB

                                X

     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
 SECURITIES ACT OF 1934 FOR THE PERIOD ENDED SEPTEMBER 30, 2000



    TRANSITION REPORT PURSUANT TO 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.
      (Exact name of registrant as specified 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)

                          (727) 726-0763
       (Registrant's telephone number, Including area code)

                          Not applicable
  (Former name, former address and former fiscal year, if changed
                       since last report)

Indicate  by check mark whether the registrant (1) has filed  all
reports  required  to be filed by Section 13  and  15(d)  of  the
Securities  Exchange Act of 1934 during the preceding  12  months
(or for such shorter periods 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 ____.


As of October 31st, 2000 there were 2,343,008 shares of common
 stock outstanding

             This Form 10-QSB consists of 19 pages.


<PAGE> 2
                    Nicholas Financial, Inc.
                           Form 10-QSB
                              Index


Part I.  Financial Information                                Page

Item 1.  Financial Statements (Unaudited)

         Condensed Consolidated Balance Sheet
          as of September 30, 2000.............................3

         Condensed Consolidated Statements of
          Income for the three and six months
          ended September 30, 2000 and 1999....................4

         Condensed Consolidated Statements of
          Cash Flows for the six months ended
          September 30, 2000 and 1999..........................5

         Notes to the Condensed Consolidated
          Financial Statements.................................6

Item 2.  Management's Discussion and Analysis of Financial
          Condition and Results of Operations.................10

Part II. Other Information

Item 1.  Legal Proceedings....................................16

Item 2.  Changes in Securities and Use of Proceeds............16

Item 3.  Defaults upon Senior Securities......................16

Item 4.  Submission of Matters to a Vote of
          Security Holders....................................16

Item 5.  Other Information....................................16

Item 6.  Exhibits and Reports on Form 8-K.....................16

         Signatures...........................................17

         Exhibit Index........................................18

<PAGE> 3

<TABLE>
<CAPTION>
                     Nicholas Financial, Inc.
               Condensed Consolidated Balance Sheet
                            (Unaudited)

                                                   September 30,
                                                       2000
                                                   -------------
<S>                                                <C>
Assets
Cash                                                 $    98,221
Finance receivables, net                              60,545,520
Accounts receivable                                       22,936
Prepaid expenses and other assets                        596,042
Property and equipment, net                              367,189
Deferred income taxes                                  1,190,888
                                                   -------------
Total assets                                         $62,820,796
                                                   =============
Liabilities
Line of credit                                       $45,919,549
Notes payable - related party                          1,118,008
Accounts payable                                       2,530,425
Income taxes payable                                      35,922
Deferred revenues                                        577,149
Other liabilities                                         16,232
                                                   -------------
                                                      50,197,285

Shareholders' equity

Preferred stock, no par: 5,000,000 shares
authorized; none  issued  and outstanding                      -

Common stock, no par: 50,000,000 shares
authorized; 2,343,008 shares issued and
outstanding                                            3,666,097

Retained earnings                                      8,957,414
                                                   -------------
                                                      12,623,511
                                                   -------------
Total liabilities and shareholders' equity           $62,820,796
                                                   =============
See accompanying notes.

</TABLE>

<PAGE> 4
<TABLE>
<CAPTION>

                        Nicholas Financial, Inc.
               Condensed Consolidated Statements of Income
                               (Unaudited)


                                    Three months ended        Six months ended
                                       September 30,            September 30,
                                     2000         1999         2000       1999
                                   ------------------------------------------------
<S>                              <C>          <C>          <C>         <C>
Revenue:
Interest income on
 finance receivables              $4,250,555   $3,132,293   $8,160,070  $5,967,474
Sales                                 99,057      130,000      215,867     265,448
                                   ------------------------------------------------
                                   4,349,612    3,262,293    8,375,937   6,232,922
Expenses:
Cost of sales                         19,771       22,295       45,628      37,826
Marketing                            119,164       95,920      217,442     187,713
Administrative                     1,545,740    1,186,054    3,069,876   2,336,615
Provision for credit losses          305,079      224,651      676,789     475,329
Depreciation and amortization         39,000       22,000       66,000      46,140
Interest expense                     955,488      678,644    1,790,511   1,302,153
                                   ------------------------------------------------
                                   2,984,242    2,229,564    5,866,246   4,385,776
                                   ------------------------------------------------
Operating income before
 income taxes                      1,365,370    1,032,729    2,509,691   1,847,146

Income tax expense (benefit):
Current                              526,951      435,632    1,042,958     882,182
Deferred                                   -      (40,720)     (75,000)   (175,000)
                                   ------------------------------------------------
                                     526,951      394,912      967,958     707,182
                                   ------------------------------------------------
Net Income                          $838,419     $637,817   $1,541,733  $1,139,964
                                   ================================================
Earnings per share - basic             $0.36        $0.27        $0.66       $0.48
                                   ================================================
Earnings per share - diluted           $0.33        $0.25        $0.61       $0.45
                                   ================================================

See accompanying notes.

</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>

                        Nicholas Financial, Inc.
             Condensed Consolidated Statements of Cash Flows
                               (Unaudited)


                                         Six months ended September 30,
                                               2000           1999
                                         ------------------------------
<S>                                     <C>             <C>
Operating activities
Net income                               $  1,541,733    $  1,139,964
Adjustments to reconcile net
 income to net cash provided
  by operating activities:
Depreciation                                   66,000          46,140
Provision for credit losses                   676,789         475,329
Deferred income taxes                         (75,000)       (175,000)
 Changes in operating assets and
  liabilities:
  Accounts receivable                          (2,014)          5,135
  Prepaid expenses and other assets          (203,358)       (150,510)
  Deferred revenues                            58,431          17,070
  Accounts payable                           (165,198)        570,398
  Other liabilities                                 -          (2,896)
  Income taxes payable                         (9,043)          4,770
                                         ------------------------------
Net cash provided by operating activities   1,888,340       1,930,400

Investing activities
Increase in finance receivables,
 net of principal collected                (9,207,202)     (4,119,150)
Purchase of property and equipment,
 net of disposals                            (101,595)        (35,910)
                                         ------------------------------
Net cash used in investing activities      (9,308,797)     (4,155,060)

Financing activities
Repayment of notes payable -
 related party                               (200,000)         (3,741)
Net proceeds from line of credit            7,505,000       1,850,000
(Repurchase) sale of common stock             (45,505)         10,161
                                         ------------------------------
Net cash provided by financing activities   7,259,495       1,856,420
                                         ------------------------------

Net decrease in cash                         (160,962)       (368,240)
Cash, beginning of period                     259,183         509,418
                                         ------------------------------
Cash, end of period                           $98,221        $141,178
                                         ==============================
See accompanying notes.

</TABLE>

<PAGE> 6


                        Nicholas Financial, Inc.
        Notes to the Condensed Consolidated Financial Statements
                              (Unaudited)
                          September 30, 2000


1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements
of  Nicholas  Financial, Inc. (the "Company") have  been  prepared  in
accordance  with generally accepted accounting principles for  interim
financial  information  and  with  the  instructions  to  Form  10-QSB
pursuant  to  the Securities and Exchange Act of 1934, as  amended  in
Article  10  of Regulation SB, as amended. Accordingly,  they  do  not
include  all  of the information and footnotes required  by  generally
accepted  accounting principles for complete financial statements.  In
the  opinion  of  management, all adjustments  (consisting  of  normal
recurring accruals) considered necessary for a fair presentation  have
been  included.  Operating results for the six months ended  September
30,  2000  are not necessarily indicative of the results that  may  be
expected  for the year ending March 31, 2001. For further information,
refer  to the consolidated financial statements and footnotes  thereto
included  in  the Company's Annual Report on Form 10-K  for  the  year
ended March 31, 2000.

2. 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> 7

<TABLE>
<CAPTION>

                        Nicholas Financial, Inc.
        Notes to the Condensed Consolidated Financial Statements
                               (Unaudited)
                           September 30, 2000



                                          Three months ended     Six months ended
                                             September 30,         September 30,
                                           2000       1999        2000        1999
                                        ----------------------------------------------
<S>                                    <C>         <C>        <C>          <C>
Numerator:

 Numerator for basic earnings per
  share - Net income Available to
  common stockholders                   $838,419    $637,817   $1,541,733   $1,139,964

 Effect of dilutive securities:
    Convertible debt                      15,554      24,909       31,108       49,818
 Numerator for dilutive earnings       ------------------------------------------------
  per share - income available to
  common stockholders after assumed
  conversions                           $853,973    $662,726   $1,572,841   $1,189,782
                                       ================================================
Denominator:
 Denominator for basic earnings per
  share - Weighted average shares      2,343,008   2,351,756    2,347,359    2,351,682

 Effect of dilutive securities: (A)
   Employee stock options                 56,210      52,721       63,322       42,299
   Convertible debt                      180,556     264,798      180,556      264,798
                                       ------------------------------------------------
 Dilutive potential common shares        236,766     317,519      243,878      307,097

 Denominator for diluted earnings
  per share - Adjusted weighted-
  average shares and assumed
  Conversions                          2,579,774   2,669,275    2,591,237    2,658,779
                                       ================================================
Earnings per share - basic                 $0.36       $0.27        $0.66        $0.48
                                       ================================================
Earnings per share - diluted               $0.33       $0.25        $0.61        $0.45
                                       ================================================

Footnote A:
       The  following  options  and
warrants were outstanding  but  not
included  in  the  computation   of
diluted  earnings per share because
the exercise price was greater than
the  average  market price  of  the
common  shares and, therefore,  the
effect would be antidilutive.

   Options                                35,500           -       35,500            -
    Warrants                                   -     333,333            -      333,333

</TABLE>

<PAGE> 8

                        Nicholas Financial, Inc.
        Notes to the Condensed Consolidated Financial Statements
                               (Unaudited)
                           September 30, 2000


3. Finance Receivables

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


    Finance receivables, gross contract           $96,602,579
    Less:
       Unearned interest                          (23,068,824)
                                                  -----------
                                                   73,533,755

       Nonrefundable dealer reserves               (9,853,150)
       Allowance for credit losses                 (3,135,085)
                                                  -----------
       Finance receivables, net                   $60,545,520


The terms of the receivables range from 12 to 60 months and bear a
weighted average effective interest rate of 24%.


4. Line of Credit

The Company has a $60 million line of credit facility (the Line) which
expires  on November 30, 2002. Borrowings under the Line bear interest
at  the prime rate. The Company also has several LIBOR pricing options
available.   If  the outstanding balance falls below $10  million  the
Line  bears  interest  at  the  prime rate  plus  1.75%.   Pledged  as
collateral for this credit facility are all of the assets of  Nicholas
Financial, Inc. and its subsidiaries.

On May 11, 1999 the Company entered into an 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.

On  August 18, 1999 the Company terminated a $5 million swap  maturing
on  May  24,  2004  in exchange for $52,000. In addition  the  Company
entered  into  an  interest rate swap with a notional  amount  of  $10
million at a fixed rate of 5.80%, provided that 30 day libor does  not
exceed 8%, maturing on May 24, 2003. In the event 30 day libor exceeds
8.00%,  the  fixed rate of 5.80% would swap back to the variable  rate
for all periods where 30 day libor exceeds 8.00%.

On May 17, 2000 the Company entered into an interest rate swap with  a
notional amount of $10 million at a fixed rate of 6.87%, provided that
30  day  libor does not exceed 7.7%, maturing on May 17, 2004. In  the
event  30 day libor exceeds 7.70%, the fixed rate of 6.87% would  swap
back  to  the variable rate for all periods where 30 day libor exceeds
7.70%.

<PAGE> 9

                        Nicholas Financial, Inc.
        Notes to the Condensed Consolidated Financial Statements
                               (Unaudited)
                           September 30, 2000


5. Notes Payable - Related Party

Notes payable consisted of the following:


Notes payable, due through November 2001, unsecured,
subordinated to the Line, with interest  at  varying
rates  up  to  12%  with  quarterly  and  semiannual
interest payments.  The notes are convertible at the
option  of the holder, into common shares at  prices
from $4.50 to $6.00 per share.                          $850,000

Note  payable, unsecured, interest at 12%, quarterly
interest due through August 2001, at which time  the
entire principal balance is due.                         268,008
                                                       ---------
                                                      $1,118,008

<PAGE> 10

            MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                   CONDITION AND RESULTS OF OPERATIONS
Introduction

   Consolidated net income increased for the three month period  ended
September  30,  2000  to $838,419 from $637,817 for  the  three  month
period  ended September 30, 1999. Earnings were favorably impacted  by
an  increase  in  the outstanding loan portfolio.  The  Company's  NDS
subsidiary did not contribute significantly to consolidated operations
in the three month periods ended September 30, 2000 or 1999.

   Consolidated  net income increased for the six month  period  ended
September  30,  2000 to $1,541,733 from $1,139,964 for the  six  month
period  ended September 30, 1999. Earnings were favorably impacted  by
an  increase  in  the outstanding loan portfolio.  The  Company's  NDS
subsidiary did not contribute significantly to consolidated operations
in the six month periods ended September 30, 2000 or 1999.

<TABLE>
<CAPTION>
                                         Three Months Ended          Six Months Ended
                                            September 30               September 30
                                         2000          1999         2000           1999
                                     ------------------------------------------------------
<S>                                  <C>           <C>           <C>            <C>
Average Net Finance Receivables(1)   $72,742,751   $52,573,141   $70,043,032    $51,493,401

Average Indebtedness(2)               46,669,224    32,964,239    44,409,224     32,313,647

Total Interest Revenues                4,250,555     3,132,293     8,160,069      5,967,474

Interest Expense                         955,488       678,644     1,790,511      1,302,153
                                     ------------------------------------------------------
Net Interest Income                    3,295,067     2,453,649     6,369,558      4,665,321

Gross Portfolio Yield(3)                  23.37%        23.83%        23.30%         23.18%

Average Cost of Borrowed Funds(2)          8.19%         8.23%         8.06%          8.06%
                                     ------------------------------------------------------
Net Interest Spread(4)                    15.18%        15.60%        15.24%         15.12%

Net Portfolio Yield(3)                    18.12%        18.67%        18.19%         18.12%

Write-off to Liquidation(5)                8.13%         7.39%         6.94%          6.41%

Net Charge-Off Percentage(6)               6.78%         6.68%         5.83%          5.61%

</TABLE>

(1) Average  net  finance receivables represents the  average  of  net
    finance   receivables   throughout  the   period.    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  the  Line of Credit and  notes  payable-related
    party.    Average  cost  of  borrowed  funds  represents  interest
    expense as a percentage of average indebtedness.

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

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

(5) Liquidation  is  defined  as  beginning  receivable  balance  plus
    current  period purchases minus voids and refinances minus  ending
    receivable balance.

(6) Net  charge-off percentage represents net charge-offs  divided  by
    average net finance receivables outstanding during the period.

<PAGE> 11

Three  months  ended September 30, 2000 compared to three  months  ended
September 30, 1999


 Interest Income and Loan Portfolio

       Interest  revenue increased 36% to $4.3 million for the  period
ended  September  30,  2000, from $3.1 million for  the  period  ended
September  30, 1999. The net finance receivable balance totaled  $60.6
million  at September 30, 2000, an increase of 39% from $43.6  million
at  September 30, 1999. The gross finance receivable balance increased
38%  to  $96.6  million at September 30, 2000 from  $69.8  million  at
September 30, 1999. The primary reason interest revenue increased  was
the  increase  in the outstanding loan portfolio. The gross  portfolio
yield decreased from 23.83% for the period ended September 30, 1999 to
23.37%  for  the  period ended September 30, 2000. The primary  reason
that  net  finance  receivables increased was  the  opening  of  three
additional offices.

 Computer Software Business

   Sales for the period ended September 30, 2000 were $99,057 compared
to  $130,000  for the period ended September 30, 1999, a  decrease  of
24%.   This  decrease  was  primarily  due  to  a  decrease   in   new
installations during the period ended September 30, 2000.

 Operating Expenses

       Operating  expenses, excluding provision for credit losses  and
interest  expense,  increased to $1.7 million  for  the  period  ended
September  30,  2000 from $1.3 million for the period ended  September
30,  1999.  This  increase of 30% was primarily  attributable  to  the
opening  of three additional branches, increased home office personnel
and increased general operating expenses.

 Interest Expense

       Interest  expense increased to $955,488 for  the  period  ended
September  30,  2000  as compared to $678,644  for  the  period  ended
September  30, 1999. This increase was due to an increase  in  average
outstanding borrowings from $33.0 million to $46.7 million during  the
comparable periods. The impact of this increase was offset, in part by
a  decrease in the average cost of funds borrowed from 8.23%  for  the
period  ended  September  30,  1999 to  8.19%  for  the  period  ended
September 30, 2000.


<PAGE> 12

Six  months  ended  September 30, 2000 compared to  six  months  ended
September 30, 1999


Interest Income and Loan Portfolio

       Interest  revenue increased 37% to $8.2 million for the  period
ended  September  30,  2000, from $6.0 million for  the  period  ended
September  30, 1999. The net finance receivable balance totaled  $60.6
million  at September 30, 2000, an increase of 39% from $43.6  million
at  September 30, 1999. The gross finance receivable balance increased
38%  to  $96.6  million at September 30, 2000 from  $69.8  million  at
September 30, 1999. The primary reason interest revenue increased  was
the  increase  in the outstanding loan portfolio. The gross  portfolio
yield increased from 23.18% for the period ended September 30, 1999 to
23.30%  for  the  period ended September 30, 2000. The primary  reason
that  net  finance  receivables increased was  the  opening  of  three
additional offices.

 Computer Software Business

  Sales for the period ended September 30, 2000 were $215,867 compared
to  $265,448  for the period ended September 30, 1999, a  decrease  of
19%.   This  increase  was  primarily  due  to  a  decrease   in   new
installations during the period ended September 30, 2000.

 Operating Expenses

       Operating  expenses, excluding provision for credit losses  and
interest  expense,  increased to $3.4 million  for  the  period  ended
September  30,  2000 from $2.6 million for the period ended  September
30,  1999.  This  increase of 30% was primarily  attributable  to  the
opening  of three additional branches, increased home office personnel
and increased general operating expenses.

 Interest Expense

       Interest expense increased to $1.8 million for the period ended
September  30, 2000 as compared to $1.3 million for the  period  ended
September  30, 1999. This increase was due to an increase  in  average
outstanding borrowings from $32.3 million to $44.4 million during  the
comparable  periods.  The  average cost  of  borrowed  funds  remained
consistent  at  8.06% for the six month periods ending  September  30,
2000 and 1999 respectively.

<PAGE> 13

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  80 Contracts with an aggregate  initial  principal
amount  of  approximately  $632,554. As of  September  30,  2000,  the
Company had 270 active pools.

  The Company pools Contracts according to branch location because the
branches  purchase contracts in different markets located in  Florida,
Georgia  and  North  Carolina . 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  September 30, 2000, the Company  had  established
reserves  for  losses on Contracts of $12,988,235  or  17.66%  of  net
outstanding receivables.

<PAGE> 14
<TABLE>
<CAPTION>

   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:


                                Six Months Ended      Six Months Ended
                               September 30, 2000    September 30, 1999
                               -----------------------------------------
<S>                        <C>    <C>   <C>        <C>    <C>    <C>
Contracts
Gross Balance Outstanding          $92,511,899            $66,884,736

                             Dollar                    Dollar
Delinquencies                Amount    Percent*        Amount   Percent*

30 to 59 days             $2,101,653     2.27%     $1,913,208     2.86%
60 to 89 days                574,363     0.62%        413,991     0.62%
90 + days                    308,290     0.33%         91,354     0.14%
                          ----------     -----     ----------     -----
Total Delinquencies       $2,984,306               $2,418,553

*Total Delinquencies as
 percent of outstanding
  balance                                3.22%                    3.62%

Direct Loans
Gross Balance Outstanding          $4,090,680              $2,905,329

Delinquencies

30 to 59 days                $46,018     1.12%        $26,579     0.92%
60 to 89 days                 10,856     0.27%          4,445     0.15%
90 + days                     10,091     0.25%          4,402     0.15%
                          ----------     -----     ----------     -----
Total Delinquencies          $66,965                  $35,426

*Total Delinquencies as a
percent of outstanding balance           1.64%                    1.22%

</TABLE>

   The  provision for credit losses was $305,079 for the  three  month
period  ended September 30, 2000 and $676,789 for the six month period
ended  September 30, 2000 as compared to $224,651 for the three  month
period  ended September 30, 1999 and $475,329 for the six month period
ended  September  30, 1999. The Company increased  its  total  reserve
percentage from 13.25% for the period ended March 31, 2000  to  13.45%
for  the period ended September 30, 2000. Management believes that the
reserve adjustments made during the three and six month periods  ended
September 30, 2000 are consistent with its reserve methodology.

Income Taxes

   The Company's effective tax rate remained relatively consistent  at
38.59%  and  38.57% for the three and six months ended  September  30,
2000,  as  compared to 38.24% and 38.29% for the three and six  months
ended September 30, 1999, respectively.

<PAGE> 15

Liquidity and Capital Resources

The  Company's cash flows for the six months ended September 30,  2000
and September 30, 1999 are summarized as follows:

<TABLE>
<CAPTION>
                                  Six months ended      Six months ended
                                    September 30,        September 30,
                                        2000                  1999
                                 ----------------------------------------
<S>                                 <C>                 <C>
  Cash provided by (used in):
      Operating  Activities-         $ 1,888,340         $ 1,930,400
      Investing Activities -
      (primarily  purchase
        of  Contracts)                (9,308,797)         (4,155,060)
      Financing Activities             7,259,495           1,856,420

      Net decrease in cash              (160,962)           (368,240)

</TABLE>

      The  Company's  primary use of working capital  during  the  six
months  ended  September 30, 2000 was the funding of the  purchase  of
Contracts.    The   Contracts  were  financed  substantially   through
borrowings  on  the Company's line of credit. The line  of  credit  is
secured primarily by Contracts, and available borrowings are based  on
a  percentage  of qualifying Contracts. As of September 30,  2000  the
Company  had approximately $14.1 million available under the  line  of
credit.  The  Company  is currently negotiating to  further  increase,
beyond the most recent increase, the size of its line of credit. Since
inception,  the  Company  has also funded a  portion  of  its  working
capital needs through cash flows from operating activities.

   On  July  6, 2000 the Company successfully renegotiated its  credit
facility. The new agreement increases the total credit facility to $60
million.

      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 the sale of additional
securities  in  the capital markets, will be sufficient  to  meet  its
short term funding needs.


Future Expansion

      The Company currently operates twenty branch locations, fourteen
in  the State of Florida, four in the State of Georgia and two in  the
State  of  North  Carolina. Each office is budgeted (size  of  branch,
number  of employees and location) to handle up to 1,000 accounts  and
up  to  $7,500,000 in outstanding receivables. To date  three  of  our
branches have reached this capacity.

      The  Company  intends  to  continue its  expansion  through  the
purchase  of  additional  Contracts and the expansion  of  its  direct
consumer loan program. As the branches continue to add customers,  the
size  of  the  loan portfolio will continue to grow.  With  the  added
volume in each branch and as the company adds new branches, it will be
necessary for the Company to increase the size of its Line of Credit.

   The Company believes that opportunity for growth continues to exist
in  the  States  of Florida, Georgia and North Carolina  and  for  the
foreseeable  future  intends generally to  concentrate  its  expansion
activities  in  these  States. The Company has identified  Greensboro,
North Carolina as an area where it may open a branch office during the
remainder of fiscal 2001.

<PAGE> 16

Forward-Looking Information

    This  10-QSB  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  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, 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,  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.


                      Part II - Other Information


Item 1.   Legal Proceedings - None

Item 2.   Changes in Securities and Use of Proceeds - None

Item 3.   Defaults upon Senior Securities - None

Item 4.   Submission of Matters to a Vote of Security Holders - None

Item 5.   Other Information - None

Item 6.   (a)  Exhibits - See exhibit index following the
                           signature page.

          (b)  Reports on Form 8-K -  None

<PAGE> 17
                              SIGNATURES

   In  accordance with the requirements of the Securities Act of 1934,
the  Registrant  certifies that it has reasonable grounds  to  believe
that  it  meets all of the requirements for filing on Form 10-QSB  and
authorized  this Report to be signed on its behalf by the undersigned,
in the City of Clearwater, State of Florida, on November 13, 2000.


                       NICHOLAS FINANCIAL, INC.
                             (Registrant)


  Date: November 13, 2000         /s/ Peter L. Vosotas
                                  --------------------------
                                  Peter L. Vosotas
                                  Chairman, President,
                                  Chief Executive Officer
                                  (Principal Executive Officer)


  Date: November 13, 2000         /s/ Ralph T. Finkenbrink
                                  ---------------------------
                                  Ralph T. Finkenbrink
                                  (Principal Financial Officer and
                                   Accounting Officer)


<PAGE> 18

                             EXHIBIT INDEX



  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) filed on March 13, 1996

4.1     Stock Certificate

        Incorporated by reference to Exhibit 4.1 to the Company's
        Form 10-SB (File No. 0-26680) filed on March 13, 1996

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) filed on March 13, 1996

10.1.2  Amendment No. 1 to Loan Agreement dated January 14, 1994

        Incorporated by reference to Exhibit 10.1.2 to the Company's
        Form 10-SB (File No. 0-26680) filed on March 13, 1996

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) filed on March 13, 1996

10.1.4  Amendment No. 2 to Loan Agreement dated June 3, 1994

        Incorporated by reference to Exhibit 10.1.4 to the Company's
        Form 10-SB (File No. 0-26680) filed on March 13, 1996

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) filed on March 13, 1996

10.1.6  Amendment No. 4 to Loan Agreement dated March 31, 1995

        Incorporated by reference to Exhibit 10.1.6 to the Company's
        Form 10-SB (File No. 0-26680) filed on March 13, 1996

10.1.7  Amendment No. 5 to Loan 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

<PAGE> 19

10.1.8  Amendment No. 6 to Loan 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

10.1.9  Amendment No. 7 to Loan 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 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 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

10.2.2  Amendment No. 10 to Loan Agreement dated November 24, 1999

        Incorporated by reference to Exhibit 10.2.2 to the Company's
        Form 10-QSB for the three months ended December 31, 1999

10.3.1  Employee Stock Option Plan

        Incorporated  by  reference  to the Company's  1999  Annual
        proxy statement dated June 29, 1999

10.3.2  Non-Employee Stock Option Plan

        Incorporated  by  reference  to the Company's  1999  Annual
        proxy statement dated June 29, 1999

10.4.1  Employment Contract, dated November 22, 1999, between Nicholas
        Financial,  Inc. and Ralph Finkenbrink, Senior Vice  President
        of Finance.

        Incorporated by reference to Exhibit 10.2.1 to the Company's
        Form 10-QSB for the three months ended December 31, 1999

21      Subsidiaries of Nicholas Financial, Inc.

        Incorporated by reference to the Company's Form 10-SB
        (File No. 0-26680) filed on March 13, 1996

24      Powers of Attorney (included on signature page hereto)

27      Financial Data Schedule (for SEC use only)

        (b)  Reports on Form 8-K

               None