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 JUNE 30, 2002



    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 July 31st, 2002 there were 5,007,831 shares of common stock
                           outstanding



<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
          June 30, 2002.........................................3

         Condensed Consolidated Statements of Income
          for the three months ended
          June 30, 2002 and 2001................................4

         Condensed Consolidated Statements of Cash
          Flows for the three months ended
          June 30, 2002 and 2001................................5

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

Item 2.  Management's Discussion and Analysis of Financial
          Condition and Results of Operations..................11

Part II. Other Information

Item 1.  Legal Proceedings.....................................17

Item 2.  Changes in Securities.................................17

Item 3.  Defaults upon Senior Securities.......................17

Item 4.  Submission of Matters to a Vote of
          Security Holders.....................................17

Item 5.  Other Information.....................................17

Item 6.  Exhibits and Reports on Form 8-K......................17

         Signatures............................................18

         Exhibit Index.........................................19


<PAGE> 3

Part I. Item 1

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

                                              June 30, 2002
                                             ---------------
<S>                                           <C>
Assets
Cash                                            $   703,987
Finance receivables, net                         78,401,483
Accounts receivable                                  12,270
Prepaid expenses and other assets                   767,958
Property and equipment, net                         383,479
Deferred income taxes                               459,780
                                                -----------
Total assets                                    $80,728,957
                                                ===========
Liabilities
Line of Credit                                  $55,133,426
Drafts Payable                                      347,469
Notes payable - related party                       548,739
Accounts payable                                  3,129,673
Derivatives                                       1,522,365
Income taxes payable                                621,913
Deferred revenues                                   769,881
                                                -----------
Total liabilities                                62,073,466

Shareholders' equity
Preferred stock, no par: 5,000,000 shares
authorized;none issued and outstanding                    -
Common stock, no par: 50,000,000 shares
authorized; 5,007,831 shares issued and
outstanding                                       4,433,408
Other comprehensive loss                         (1,549,782)
Retained earnings                                15,771,865
                                                -----------
                                                 18,655,491
                                                -----------
Total liabilities and shareholders' equity      $80,728,957
                                                ===========
See accompanying notes.

</TABLE>

<PAGE> 4

<TABLE>
<CAPTION>
                     Nicholas Financial, Inc.
            Condensed Consolidated Statements of Income
                            (Unaudited)


                                      Three months ended
                                            June 30
                                        2002        2001
                                   ------------------------
<S>                               <C>          <C>
Revenue:
Interest income on
 finance receivables               $5,233,349   $4,531,751
Sales                                  82,376       99,120
                                   ------------------------
                                    5,315,725    4,630,871
Expenses:
Cost of sales                          17,168       23,689
Marketing                             153,481      110,457
Administrative                      1,981,858    1,684,526
Provision for credit losses           547,066      352,649
Depreciation and amortization          37,000       45,000
Interest expense                      964,063      995,832
                                   ------------------------
                                    3,700,636    3,212,153
Operating income
 before income taxes                1,615,089    1,418,718

Income tax expense:
Current                               573,249      543,320
Deferred                               28,675       (5,615)
                                   ------------------------
                                      601,924      537,705
                                   ------------------------
Net income                         $1,013,165     $881,013
                                   ========================
Earnings per share - basic              $0.20        $0.19
                                   ========================
Earnings per share - diluted            $0.19        $0.17
                                   ========================

See accompanying notes.

</TABLE>

<PAGE>  5

<TABLE>
<CAPTION>

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


                                       Three months ended June 30
                                            2002          2001
                                       --------------------------
<S>                                   <C>           <C>
Operating activities
Net income                             $  1,013,165  $   881,013
Adjustments to reconcile net income
 to net cash provided by
 operating activities:
  Depreciation                               37,000       45,000
  Provision for credit losses               547,066      352,649
  Deferred income taxes                      28,675       (5,615)
Changes in operating assets and
 liabilities:
  Accounts receivable                         2,174         (919)
  Prepaid expenses and other assets        (251,305)     (57,708)
  Accounts payable                         (284,879)    (194,604)
  Drafts Payable                            (71,648)           -
  Income taxes payable                      552,061      483,319
  Deferred revenues                         114,325       62,270
                                        -------------------------
Net cash provided by operating
 activities                               1,686,634    1,565,405

Investing activities
Increase in finance receivables,
 net of principal collected              (2,881,162)  (2,425,787)
Purchase of property and equipment,
 net of disposals                           (49,630)     (37,340)
                                         ------------------------
Net cash used in investing activities    (2,930,792)  (2,463,127)

Financing activities
Issuance(repayment) of notes payable
- related party                               6,458     (200,000)
Net proceeds from Line of Credit          1,860,000      850,000
Sale of common stock                         30,448      231,560
                                         ------------------------
Net cash provided by
 financing activities                     1,896,906      881,560
                                         ------------------------
Net increase (decrease) in cash             652,748      (16,162)

Cash, beginning of period                    51,239      233,167
                                         ------------------------
Cash, end of period                      $  703,987   $  217,005
                                         ========================
See accompanying notes.

<PAGE> 6

</TABLE>
<CAPTION>

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

                          June 30, 2002


1. Basis of Presentation

The   accompanying  unaudited  condensed  consolidated  financial
statements  of Nicholas Financial Inc (the "Company")  have  been
prepared  in  accordance  with  accounting  principles  generally
accepted  in  the United States 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   accounting
principles  generally accepted in the United States 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  three  months ended  June  30,  2002  are  not
necessarily  indicative of the results that may be  expected  for
the year ending March 31, 2003. For further information, refer to
the  condensed  consolidated financial statements  and  footnotes
thereto included in the Company's Annual Report on Form 10-K  for
the year ended March 31, 2002.

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

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

                           June 30, 2002

<TABLE>
<CAPTION>
                                          Three months ended
                                                June 30,
                                             2002      2001
                                         ---------------------
<S>                                    <C>           <C>
Numerator:

 Numerator for basic earnings per
  share - Net income available to
  common stockholders                    $1,013,165   $881,013
 Effect of dilutive securities:
    Convertible debt                              -     13,098
                                         ---------------------
 Numerator for dilutive earnings
  per share - income available to
  common stockholders after
  assumed conversions                    $1,013,165   $894,111
                                         =====================
Denominator:
 Denominator for basic earnings per
  share - weighted average shares         4,998,364  4,638,213
   364     213
 Effect of dilutive securities:
  Employee stock options                    343,819    223,351
  Convertible debt                                -    311,111
                                          --------------------
 Denominator for diluted earnings per
  share - adjusted weighted-average
  shares and assumed conversions          5,342,183  5,172,675
                                          ====================
Earnings per share - basic                    $0.20      $0.19
                                          ====================
Earnings per share - diluted                  $0.19      $0.17
                                          ====================
</TABLE>

<PAGE> 8

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

                           June 30, 2002




3. Finance Receivables

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

<TABLE>
   <S>                                    <C>
    Finance receivables, gross contract    $124,643,998
      Less:
        Unearned interest                   (29,876,628)
                                            ------------
                                             94,767,370
        Nonrefundable dealer reserves       (11,686,394)
        Allowance for credit losses          (4,679,493)
                                            ------------
    Finance receivables, net               $ 78,401,483
                                            ============

</TABLE>

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 $75 million Line of Credit facility (the Line)
which  expires  on November 30, 2004. 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  2.00%.  Pledged as collateral for this credit facility  are
all   of   the  assets  of  Nicholas  Financial,  Inc.  and   its
subsidiaries.


5. Notes Payable - Related Party

The Company's notes payable consisted of unsecured, interest at
9.5%, principal and interest due upon 30-day demand notes
totaling $548,739.

<PAGE> 9


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


6. Derivatives and Hedging

In  June  1998, the Financial Accounting Standards Board ("FASB")
issued  Statement of Financial Accounting Standards ("SFAS")  No.
133,   "Accounting   for  Derivative  Instruments   and   Hedging
Activities" ("SFAS 133"). This statement establishes requirements
for  accounting  and  reporting  of  derivative  instruments  and
hedging activities. SFAS 133 was updated by the issuance of  SFAS
No.  137,  "Accounting  for Derivative  Instruments  and  Hedging
Activities - Deferral of the Effective Date of SFAS No. 133"  and
SFAS  No. 138 "Accounting for Certain Derivative Instruments  and
Certain  Hedging  Activities - amendment of  FASB  Statement  No.
133."   As amended, SFAS 133 establishes accounting and reporting
standards   for   derivative   instruments,   including   certain
derivative  instruments embedded in other contracts (collectively
referred to as derivatives), and for hedging activities.

The  Company  adopted the provisions of SFAS 133, as  amended  by
SFAS 137 and SFAS 138, on April 1, 2001, which requires that  all
derivative instruments be recorded on the balance sheet  at  fair
value.   The   estimated  fair  value  of  derivative   financial
instruments represents the amount required to enter into  similar
offsetting contracts with similar remaining maturities  based  on
quoted market prices.

The  Company utilizes interest rate swaps to manage its  interest
rate  exposure.  The swaps effectively convert a portion  of  the
Company's  floating  rate  debt to a  fixed  rate,  more  closely
matching  the  interest  rate characteristics  of  the  Company's
finance receivables. When entering into contracts intended by the
Company  to  receive  hedge  accounting  treatment,  the  Company
formally designates and documents the financial instrument  as  a
hedge  of  a  specific underlying exposure, as well as  the  risk
management  objectives and strategies for undertaking  the  hedge
transaction.

<TABLE>
<CAPTION>

The Company has entered into the following cash-flow hedges:

<S>     <C>               <C>          <C>      <C>
                                         Fixed
                                          Rate
          Date               Notional      Of
          Entered              Amount   Interest Maturity Date
        ---------------------------------------------------
         May 11, 1999      $10,000,000   5.81%   May 24, 2002
         August 19, 1999    10,000,000   5.80%   August 1, 2003
         May 17, 2000       10,000,000   6.87%   May 17, 2004
         March 30, 2001     10,000,000   4.89%   March 30, 2003
         October 5, 2001    10,000,000   3.85%   October 5, 2004
         June 28, 2002      10,000,000   3.83%   July 2, 2005


</TABLE>

<PAGE> 10


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



The  Company  utilizes  the above noted interest  rate  swaps  to
manage  its interest rate exposure. The swaps effectively convert
a  portion  of the Company's floating rate debt to a fixed  rate,
more  closely matching the interest rate characteristics  of  the
Company's finance receivables.

The  Company  has also entered into various interest rate  option
agreements with maturities through May 17, 2004.

For  cash-flow hedge transactions, changes in the fair  value  of
the  derivative instrument are recorded as a component  of  other
comprehensive income, and reclassified into earnings in the  same
period  or  periods  during which earnings are  affected  by  the
variability of the cash flows of the hedged item. Any ineffective
portion  of  a  derivative instrument's change in fair  value  is
immediately recognized in earnings.


Critical Accounting Policy

The Company's critical accounting policy relates to the allowance
for  losses on loans. It is based on management's opinion  of  an
amount  that  is  adequate  to  absorb  losses  in  the  existing
portfolio. The allowance for credit losses is established through
a provision for loss based on management's evaluation of the risk
inherent in the loan portfolio, the composition of the portfolio,
specific  impaired  loans and current economic  conditions.  Such
evaluation,  which includes a review of all loans on  which  full
collectibility  may  not be reasonably assured,  considers  among
other  matters, the estimated net realizable value  or  the  fair
value   of   the  underlying  collateral,  economic   conditions,
historical   loan  loss  experience,  management's  estimate   of
probable credit losses and other factors that warrant recognition
in providing for an adequate credit loss allowance.


<PAGE> 11


Part I. Item 2

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

   Consolidated net income increased for the three  month  period
ended  June  30, 2002 to $1,013,165 from $881,013 for  the  three
month  period  ended  June  30,  2001.  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 June 30,
2002 or 2001.


<TABLE>
<CAPTION>
                                      Three Months Ended June 30
                                          2002           2001
                                     ----------------------------
<S>                                  <C>            <C>
Average Net Finance Receivables (1)   $93,781,204    $80,590,601
Average Indebtedness(2)                55,581,193     49,941,434

Total Revenues-Contract Related         5,233,349      4,531,751
Interest Expense                          964,063        995,832
                                     ----------------------------
Net Interest Income                     4,269,286      3,535,919

Gross Portfolio Yield(3)                   22.32%         22.49%
Average Cost of Borrowed Funds (2)          6.94%          7.98%
                                     ----------------------------
Net Interest Spread (4)                    15.38%         14.51%

Net Portfolio Yield (3)                    18.21%         17.55%
Write-off to Liquidation (5)                6.95%          7.34%
Net Charge-Off Percentage (6)               7.90%          6.33%

</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> 12


Three  months  ended June 30, 2002 compared to three  months  ended
June 30, 2001


 Interest Income and Loan Portfolio

       Interest  revenue increased 15% to $5.2  million  for  the
period  ended  June 30, 2002, from $4.5 million  for  the  period
ended  June 30, 2001. The net finance receivable balance  totaled
$78.4 million at June 30, 2002, an increase of 17% from the $67.1
million  at  June  30,  2001.  The  primary  reason  net  finance
receivables increased was the increase in the receivable base  of
several existing branches.   The gross finance receivable balance
increased  17%  to  $124.6 million at June 30, 2002  from  $106.7
million  at  June  30, 2001. The primary reason interest  revenue
increased was the increase in the outstanding loan portfolio. The
gross  portfolio yield decreased from 22.49% for the period ended
June 30, 2001 to 22.32% for the period ended June 30, 2002.

 Computer Software Business

   Sales for the period ended June 30, 2002 were $82,376 compared
to $99,120 for the period ended June 30, 2001, a decrease of 17%.
This  decrease  was  primarily due  to  lower  revenue  from  the
existing customer base and the continued emphasis on the  finance
subsidiary.

 Operating Expenses

       Operating expenses, excluding provision for credit  losses
and  interest expense, increased to $2.2 million for  the  period
ended  June 30, 2002 from $1.9 million for the period ended  June
30,  2001. This increase of 17% was primarily attributable to the
additional  staffing  of  several  existing  branches,  increased
general operating expenses and the opening of 3 additional branch
offices.

 Interest Expense

      Interest expense decreased to $964,063 for the period ended
June  30, 2002 as compared to $995,832 for the period ended  June
30,  2001.  This decrease was due to a reduction in  the  average
cost of outstanding borrowings from 7.98% during the three months
ended  June 30, 2001 to 6.94% during the three months ended  June
30, 2002.

<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 73 Contracts
with  an  aggregate  initial principal  amount  of  approximately
$596,563. As of June 30, 2002, the Company had 379 active pools.

   The  Company  pools  Contracts according  to  branch  location
because  the  branches  purchase contracts in  different  markets
located  in Florida, Georgia, North Carolina, South Carolina  and
Ohio. 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 accreted into 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 June 30, 2002, the Company had
established  reserves for losses on Contracts of  $16,139,139  or
13.48% of gross outstanding receivables under the Contracts.


<PAGE> 14


   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>
                          Three Months Ended    Three Months Ended
                             June 30, 2002         June 30, 2001
                          ------------------    ------------------
<S>                     <C>   <C>    <C>      <C>  <C>   <C>
Contracts
Gross Balance Outstanding     $119,737,365         $102,217,743

                            Dollar               Dollar
Delinquencies               Amount  Percent*     Amount  Percent*
                         ---------  --------  ---------  --------
30 to 59 days           $1,896,347    1.59%  $2,096,637    2.05%
60 to 89 days              827,527    0.69%     570,215    0.56%
90   +  days               173,315    0.14%     176,730    0.17%
                         ---------    -----   ---------    -----
Total Delinquencies     $2,897,189           $2,843,582

*Total Delinquencies
 as percent of
 outstanding balance                  2.42%                2.78%

Direct Loans
Gross Balance Outstanding      $ 4,906,633          $ 4,471,708

Delinquencies
30 to 59 days              $27,245    0.56%     $41,706    0.93%
60 to 89 days               14,427    0.29%      16,646    0.37%
90 + days                    5,042    0.10%         609    0.01%
                           -------    -----     -------    -----
Total Delinquencies        $46,714              $58,961

*Total Delinquencies
 as a percent of
 outstanding balance                  0.95%                1.31%

</TABLE>

  The  provision  for credit losses was $547,066  for  the  three
month period ended June 30, 2002 as compared to $352,649 for  the
three month period ended June 30, 2001. The Company decreased its
total  reserve percentage from 13.81% for the period  ended  June
30, 2001 to 13.48% for the period ended June 30, 2002. Management
believes that the reserve adjustments made during the three month
period  ended  June  30,  2002 are consistent  with  its  reserve
methodology.

Income Taxes

  The Company's effective tax rate remained relatively consistent
at  37.27% for the three months ended June 30, 2002, as  compared
to 37.90% for the three months ended June 30, 2001.


<PAGE> 15




Liquidity and Capital Resources

The Company's cash flows for the three months ended June 30, 2002
and June 30, 2001 are summarized as follows:

<TABLE>
<CAPTION>
                                Three months ended  Three months ended
                                   June 30, 2002      June 30, 2001
                                ------------------  ------------------
 <S>                               <C>                <C>
  Cash provided by (used in):
   Operating Activities -           $ 1,686,634        $ 1,565,405

   Investing Activities -
   (primarily purchase of Contracts) (2,930,792)        (2,463,127)

   Financing Activities               1,896,906            881,560

  Net increase (decrease) in cash       652,748            (16,162)


</TABLE>

      The  Company's  primary use of working capital  during  the
three  months ended June 30, 2002 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  June  30,
2002  the Company had approximately $19.9 million available under
the  Line of Credit. Since inception, the Company has also funded
a  portion  of its working capital needs through 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  the  sale  of  additional
securities in the capital markets, will be sufficient to meet its
short term funding needs.

   The Company renewed its credit facility on June 28, 2002.  The
new  loan  agreement expires November 30, 2004 and bears interest
at  the prime rate and offers several LIBOR pricing options.  The
new  loan  agreement  released Bank One as a secondary  bank  and
added  First Tennessee Bank. The Company is pleased with its  new
banking  relationship  and believes it  will  be  beneficial  for
future expansion.



Future Expansion

     The Company currently operates twenty-four branch locations,
fifteen  in the State of Florida, three in the State of  Georgia,
three  in the State of North Carolina, one in the state of  South
Carolina  and two in the state of Ohio.  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.


<PAGE> 16

 The Company currently 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
the  Company's 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 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,
Georgia, North Carolina, South Carolina and Ohio and intends  to
continue  its expansion activities in those states. The  Company
is  currently expanding its automobile financing program in  the
State  of  Ohio.  The  Company has targeted  certain  geographic
locations within the State of Ohio where it believes there is  a
sufficient  market  for  its automobile financing  program.  The
Company  is currently purchasing Contracts in the State of  Ohio
utilizing  employees  who reside in the  State  of  Ohio.  These
employees  are developing their respective markets in  Ohio  and
the Company has created a Central Buying Office in its Corporate
Headquarters  to purchase, process and service these  Contracts.
The  Company's  strategy is to monitor  these  new  markets  and
ultimately   decide  where  and  when  to  open  actual   branch
locations. No assurances can be given, however, that any further
such  expansion will occur. The Company is also analyzing  other
markets  in  States the Company does not currently  operate  in,
however no assurance can be given that any expansion will  occur
in these new markets.



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.


<PAGE> 17

                   Part II - Other Information


Item 1.
Legal Proceedings - None

Item 2.
Changes in Securities

   On  June  30,  2001, the Company issued 44,444 shares  of  its
Common  Stock  to the Roger T. Mahan Grantor Trust (the  "Grantor
Trust")  pursuant  to  the  Grantor  Trust's  exercise   of   its
conversion right under a Convertible Promissory Note, dated  June
30,  1995  (the "Grantor Trust Note"), issued by the  Company  in
favor  of  the Grantor Trust.  The aggregate principal amount  of
the  Grantor  Trust Note was $200,000 and the maturity  date  was
June  30, 2001.  The conversion price was $4.50 per share.  As  a
result  of such conversion, the Grantor Trust Note was cancelled.
The issuance of shares of the Company's Common Stock pursuant  to
this  transaction is claimed to be exempt from registration under
the  Securities Act of 1933, as amended, pursuant to Section 4(2)
thereof.

   On  August 9, 2001, the Company issued 111,111 shares  of  its
Common  Stock  to  the  Mahan Family Trust (the  "Family  Trust")
pursuant  to the Family Trust's exercise of its conversion  right
under a Convertible Promissory Note, dated November 30, 1992 (the
"Family  Trust  Note"), issued by the Company  in  favor  of  the
Family Trust.  The aggregate principal amount of the Family Trust
Note  was  $500,000 and the maturity date was November 30,  2001,
subject  to  certain  prepayment rights granted  to  the  Company
thereunder.  Pursuant to such rights, the Company gave notice  on
July 10, 2001 that it intended to prepay the Family Trust Note in
full.    Under  the  terms  of  the  Family  Trust   Note,   this
notification entitled the Family Trust to convert the  note  into
shares of Common Stock, at a conversion price of $4.50 per share.
As   result  of  such  conversion,  the  Family  Trust  Note  was
cancelled.  The issuance of shares of the Company's Common  Stock
pursuant  to  this  transaction is  claimed  to  be  exempt  from
registration  under  the  Securities Act  of  1933,  as  amended,
pursuant to Section 4(2) thereof.

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 -

          On   May   13,  2002  Nicholas  Financial,  Inc.   (the
       "Company") was notified in writing that Melvin  S.  Cutler
       has  retired  from the Board and will not  stand  for  re-
       election this August at the Company's Annual meeting.  The
       Board  of  Directors  will not fill  this  casual  vacancy
       until  it  nominates  an individual  whose  name  will  be
       included  in  the  Company's 2002  Proxy  Statement  under
       "Proposal 1 - Election of Directors.

          On   June  28,  2002   Nicholas  Financial,  Inc.  (the
       "Company") amended its credit line to extend the  maturity
       date until November 30, 2004.


<PAGE> 18

                           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
August 13, 2002.


                    NICHOLAS FINANCIAL, INC.
                          (Registrant)


  Date: August 13, 2002         /s/ Peter L. Vosotas
                                -----------------------
                                Peter L. Vosotas
                                Chairman, President,
                                Chief Executive Officer
                                (Principal Executive
                                 Officer)


  Date: August 13, 2002         /s/ Ralph T. Finkenbrink
                                -------------------------
                                Ralph T. Finkenbrink
                                (Principal Financial Officer
                                 and Accounting Officer)


<PAGE> 19
                          EXHIBIT INDEX


Item 13. Exhibits and Reports on Form 8-K



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

       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

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

<PAGE> 20

10.1.10 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

10.1.11 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

10.1.12 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

10.1.13 Amendment No. 11 to Loan Agreement dated August 1,
         2000

        Incorporated by reference to Exhibit 10.1.13 to the
         Company's Form 10-KSB for the year ended
         March 31, 2001

10.1.14 Amendment No. 12 to Loan Agreement dated March 16, 2001

        Incorporated by reference to Exhibit 10.1.14 to the
         Company's Form 10-KSB for the year ended
         March 31, 2001

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

10.4.2  Employment Contract, dated March 16, 2001, between
         Nicholas Financial, Inc. and Peter L. Vosotas President
         & Chief Executive Officer.

        Incorporated by reference to the Company's 2001 Annual
         proxy statement dated July 2, 2001


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)


99.1    Written Statement of the Chief Executive Officer Pursuant
         to 18 U.S.C.  1350

99.2    Written Statement of the Chief Financial Officer Pursuant
         to 18 U.S.C.  1350



<PAGE> 21


Exhibit 99.1

      Written Statement of the Chief Executive Officer
                 Pursuant to 18 U.S.C.  1350

     Solely for the purposes of complying with 19 U.S.C.
1350, I , the undersigned Chief Executive Officer of
Nicholas Financial, Inc. (the "Company"), hereby certify,
based on my knowledge, that the Quarterly Report on Form 10-
Qsb of the Company for the quarter ended June 30, 2002 (the
"Report") fully complies with the requirements of Section
13(a) of the Securities Exchange Act of 1934 and that
information contained in the Report fairly presents, in all
material respects, the financial condition and results of
operations of the Company.



/s/ Peter L Vosotas
---------------------------------
Peter L. Vosotas
Chief Executive Officer
August 13, 2002

<PAGE> 22

Exhibit 99.2


      Written Statement of the Chief Financial Officer
                 Pursuant to 18 U.S.C.  1350

     Solely for the purposes of complying with 19 U.S.C.
1350, I , the undersigned Chief Financial Officer of
Nicholas Financial, Inc. (the "Company"), hereby certify,
based on my knowledge, that the Quarterly Report on Form 10-
Qsb of the Company for the quarter ended June 30, 2002 (the
"Report") fully complies with the requirements of Section
13(a) of the Securities Exchange Act of 1934 and that
information contained in the Report fairly presents, in all
material respects, the financial condition and results of
operations of the Company.



/s/ Ralph Finkenbrink
---------------------------------
Ralph Finkenbrink
Chief Executive Officer
August 13, 2002