<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 DECEMBER 31, 1998



    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 January 31st, 1999 there were 2,363,608 shares of common
                        stock outstanding
                                
             This Form 10-QSB consists of 20 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 December 31, 1998...................................3

     Condensed Consolidated Statements of
      Income for  the  three and nine months
      ended December 31, 1998 and 1997..........................4

     Condensed Consolidated Statements of
      Cash Flows for the nine months ended
      December 31, 1998 and 1997................................5

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

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

Part II. Other Information

Item 1. Legal Proceedings......................................18

Item 2. Changes in Securities..................................18

Item 3. Defaults upon Senior Securities........................18

Item 4. Submission of Matters to a Vote of
         Security Holders......................................18

Item 5. Other Information......................................18

Item 6. Exhibits and Reports on Form 8-K.......................18

        Signatures.............................................19

        Index of Exhibits......................................20


<PAGE> 3

<TABLE>
<CAPTION>

                     Nicholas Financial, Inc.
               Condensed Consolidated Balance Sheet
                            (Unaudited)


                                                    December 31
                                                       1998
                                                   ---------------
<S>                                                 <C>
Assets                                                          
Cash                                                $    392,655
Finance receivables, net                              36,468,483
Accounts receivable                                       25,776
Prepaid expenses and other assets                        513,730
Property and equipment, net                              209,669
Deferred income taxes                                  1,242,212
                                                     ------------
Total assets                                         $38,852,525
                                                     ============

Liabilities                                                     
Line of credit                                       $27,064,549
Notes payable - related party                          1,627,595
Accounts payable                                       1,630,316
Income taxes payable                                      88,525
Deferred revenues                                        385,860
Other liabilities                                         20,896
                                                     ------------
                                                      30,817,741
                                                                
Shareholders' equity                                            
Preferred stock, no par: 5,000,000 shares                       
 authorized; none issued and outstanding                       -
Common stock, no par: 50,000,000 shares                         
 authorized; 2,363,608 shares issued 
 outstanding and                                       3,793,997
Retained earnings                                      4,240,787
                                                     ------------
                                                       8,034,784
                                                     ------------
Total liabilities and shareholders' equity           $38,852,525
                                                     ============

See accompanying notes.

</TABLE>
<PAGE> 4
<TABLE>
<CAPTION>
                     Nicholas Financial, Inc.
            Condensed Consolidated Statements of Income                                
                            (Unaudited)


                                    Three months endedNine months ended
                                     December 31            December 31
                                  1998        1997       1998        1997
                            ------------------------------------------------
<S>                         <C>         <C>         <C>         <C>
Revenue:
Interest income on 
 finance receivables         $2,569,082  $1,898,889  $7,029,773  $5,437,818
Sales                           121,861     105,175     339,190     326,915
                             ----------------------------------------------
                              2,690,943   2,004,064   7,368,963   5,764,733
Expenses:
Cost of sales                    23,622      25,531      69,302      70,166
Marketing                       109,922      77,101     273,450     236,507
Administrative                1,092,060     782,907   2,898,748   2,241,122
Provision for credit losses     238,965     250,115     599,234     530,540
Depreciation and amortization    34,351      21,000      88,753      75,000
Interest expense                560,688     534,444   1,799,331   1,534,632
                             ----------------------------------------------
                              2,059,608   1,691,098   5,728,818   4,687,967
                             ----------------------------------------------
Operating income 
 before income taxes            631,335     312,966   1,640,145   1,076,766

Income tax expense (benefit):
Current                         347,328     380,107     926,550     750,699
Deferred                       (101,434)   (255,950)   (291,434)   (329,411)
                             ----------------------------------------------
                                245,894     124,157     635,116     421,288
                             ----------------------------------------------
Net Income                     $385,441    $188,809  $1,005,029    $655,478

Earnings per share - Basic        $0.16       $0.08       $0.43       $0.28
                             ==============================================
Earnings per share - diluted      $0.16       $0.08       $0.41       $0.28
                             ==============================================

See accompanying notes.

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

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

                                       Nine months ended December 31
                                             1998            1997
                                       -------------------------------
<S>                                      <C>              <C> 
Operating activities
Net income                                $ 1,005,029      $  655,478

Adjustments to reconcile net 
 income to net cash provided
 by operating activities:
Depreciation of property and equipment         88,753          75,000
Provision for credit losses                   599,234         530,540
Deferred income taxes                        (291,434)       (329,411)
Changes in operating assets 
 and liabilities:
Accounts receivable                            (2,371)         16,482
Prepaid expenses and other assets            (266,885)        (21,071)
Deferred revenues                             144,731          32,623
Accounts payable                             (112,142)        (25,465)
Other liabilities                                (504)         (4,128)
Income taxes payable                          (81,357)        (36,646)
                                          ----------------------------
Net cash provided by operating activities   1,083,054         893,402

Investing activities
Increase in finance receivables,
 net of principal collected                (4,643,306)     (4,401,712)
Purchase of property and equipment            (74,936)        (81,499)
                                          ----------------------------
Net cash used by investing activities      (4,718,242)     (4,483,211)

Financing activities
Net proceeds from line of credit
 borrowings and notes payable
 - related party                            3,669,955       3,535,500
Proceeds from sale of the Company's
 common stock                                  53,928          59,343
                                          ----------------------------
Net cash provided by financing activities   3,723,883       3,594,843
                                          ----------------------------
Net increase in cash                           88,695           5,034

Cash, beginning of period                     303,960         108,148
                                          ----------------------------
Cash, end of period                          $392,655        $113,182
                                          ============================

See accompanying notes.

</TABLE>
<PAGE> 6

                     Nicholas Financial, Inc.
     Notes to the Condensed Consolidated Financial Statements
                           (Unaudited)
                        December 31, 1998
                                

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 nine months  ended
December  31, 1998 are not necessarily indicative of the  results
that  may  be  expected for the year ended March  31,  1999.  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, 1998.

2. Earnings Per Share

In   1997,  the  Financial  Accounting  Standards  Board   issued
Statement of Financial Accounting Standards No. 128, Earnings per
Share. Statement 128 replaced the previously reported primary and
fully  diluted earnings per share with basic and diluted earnings
per  share. Unlike primary earnings per share, basic earnings per
share  excludes  any dilutive effects of options,  warrants,  and
convertible  securities.  Diluted  earnings  per  share  is  very
similar  to  the previously reported fully diluted  earnings  per
share.  Effective  December  31, 1997  the  Company  adopted  the
provisions  of Statement 128. All earnings per share amounts  for
all periods have been presented, and where necessary, restated to
conform to the Statement 128 requirements.

<PAGE> 7
<TABLE>
<CAPTION>

                     Nicholas Financial, Inc.
     Notes to the Condensed Consolidated Financial Statements
                            (Unaudited)
                         December 31, 1998



 The following table sets forth the computation of Basic and Fully
 Diluted Earnings per Share:
                                
                                
                                
                                           Three months            Nine months
                                               ended                  ended
                                            December 31,           December 31,
                                          1998        1997       1998        1997
                                       -------------------------------------------
<S>                                   <C>        <C>        <C>         <C>
Numerator:                                                            
                                                                      
 Numerator for basic earnings per                                     
  share - Net income available to
  common stockholders                  $ 385,441  $ 188,809  $1,005,029  $ 655,478

 Effect of dilutive securities:                         
     Convertible debt                     24,909          -      74,727          -
                                       --------------------------------------------
 Numerator for dilutive earnings
  per share - income available to
  common stockholders after assumed
  conversions                          $ 410,350  $ 188,809  $1,079,756  $ 655,478

Denominator:                                                          

 Denominator for basic earnings per                                   
  share - weighted average shares      2,358,733  2,353,263   2,357,589  2,339,526
 Effect of dilutive securities: (A)                                   
   Employee stock options                      -      6,229           -     14,403
   Convertible debt                      264,798          -     264,798          -
                                      ---------------------------------------------
 Dilutive potential common shares        264,798      6,229     264,798     14,403

   Denominator for diluted earnings                                   
    per share - adjusted weighted-
    average shares and assumed 
    conversions                        2,623,531  2,359,492   2,622,387  2,353,929
                                      =============================================
Earnings per share - basic                 $0.16      $0.08       $0.43      $0.28
                                      =============================================
Earnings per share - diluted               $0.16      $0.08       $0.41      $0.28
                                      =============================================
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                              230,700     87,293     230,700    86,097
    Warrants                             333,333    333,333     333,333   333,333

</TABLE>
<PAGE> 8

                     Nicholas Financial, Inc.
     Notes to the Condensed Consolidated Financial Statements
                            (Unaudited)
                         December 31, 1998

3. Finance Receivables

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

<TABLE>
    <S>                                   <C>
     Finance receivables, gross contract   $57,787,810
       Less:
          Unearned interest                (13,506,277)
                                           -----------
                                            44,281,533
          Nonrefundable dealer reserves     (6,606,581)
          Allowance for credit losses       (1,206,469)
                                           -----------
       Finance receivables, net            $36,468,483
                                           ===========
</TABLE>

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


4. Line of Credit

The  Company has a $35,000,000 line of credit facility (the Line)
with  BA  Business Credit, Inc. which expires on June  30,  2001.
Borrowings  under the Line bear interest at the Bank  of  America
prime  rate.  The Company also has several LIBOR pricing  options
available.   If  the outstanding balance falls below  $10,000,000
the  Line  bears interest at the Bank of America prime rate  plus
1.75%.  Pledged as collateral for this credit facility are all of
the assets of Nicholas Financial, Inc. and its subsidiaries.


<PAGE> 9
<TABLE>
<CAPTION>

                     Nicholas Financial, Inc.
     Notes to the Condensed Consolidated Financial Statements
                            (Unaudited)
                         December 31, 1998

<S>                                                    <C>
5. Notes Payable - Related Party

Notes payable consisted of the following:
                                                          
Notes  payable, unsecured, with interest at  varying
rates  up  to 12%, quarterly and semiannual interest
payments  due through June 2001, at which  time  the
entire principal balance and unpaid interest is due,
subordinated to the Line. The notes are  convertible
at  the  option  of the holder, into 240,555  common
shares at prices from $4.50 to $6.00 per share.        $1,150,000

Note  payable, unsecured, interest at 12%, quarterly
interest  due through April 2000, at which time  the
entire   balance   and  unpaid  interest   is   due,
subordinated  to the Line.  The note is  convertible
at  the  option  of the holder, into  24,242  common
shares at $8.25 per share.                                200,000

Notes payable, unsecured, interest at 12%, principal
and interest due through May 1999.                        265,041

Note  payable, unsecured, interest at 12%, quarterly
interest due through August 1999, at which time  the
entire principal balance is due.                           12,554
                                                       -----------
                                                       $1,627,595
                                                       ===========

</TABLE>

6. Comprehensive Income

As of April 1, 1998, the Company adopted Statement 130, Reporting
Comprehensive   Income,  issued  by  the   Financial   Accounting
Standards  Board.  Statement 130 establishes new  rules  for  the
reporting and display of comprehensive income and its components;
however, the adoption of this Statement has no material impact on
the Company's net income or stockholders' equity.


<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  December 31, 1998 to $385,441 from $188,809 for the  three
month  period  ended December 31, 1997. Earnings  were  favorably
impacted  by  an  increase in the outstanding loan  portfolio,  a
reduction  in  loan  losses  compared  with  last  year  and   an
improvement  in the cost of funds.  The Company's NDS  subsidiary
did  not  contribute significantly to consolidated operations  in
the three month periods ended December 31, 1998 or 1997.

   Consolidated  net income increased for the nine  month  period
ended December 31, 1998 to $1,005,029 from $655,478 for the  nine
month  period  ended December 31, 1997. Earnings  were  favorably
impacted  by  an  increase in the outstanding loan  portfolio,  a
reduction  in  loan  losses  compared  with  last  year  and   an
improvement  in  the cost of funds. The Company's NDS  subsidiary
did  not  contribute significantly to consolidated operations  in
the nine month periods ended December 31, 1998 or 1997.

<TABLE>
<CAPTION>

                             Three Months Ended        Nine Months Ended 
                                December 31               December 31
                              1998         1997        1998         1997
                          --------------------------------------------------
<S>                      <C>           <C>          <C>         <C>
Average Net Finance
Receivables (1)           $43,965,361  $34,502,973  $42,367,190  $33,033,908
Average Indebtedness(2)    28,460,477   22,372,189   27,260,625   21,257,411
Total Revenues              2,569,082    1,898,889    7,029,773    5,437,818
Interest Expense              560,688      534,444    1,799,331    1,534,632
                          --------------------------------------------------
Net Interest Income         2,008,394    1,364,445    5,230,442    3,903,186
Gross Portfolio Yield(3)       23.37%       22.01%       22.12%       21.95%
Average Cost of     
Borrowed Funds (2)              7.88%        9.56%        8.80%        9.63%
                          --------------------------------------------------
Net Interest Spread (4)        15.49%       12.45%       13.32%       12.32%
Net Portfolio Yield (3)        18.27%       15.82%       16.46%       15.75%
Write-off to Liquidation(5)     8.87%       11.11%        7.99%       10.60%
Net Charge-Off Percentage(6)    7.68%        9.57%        6.88%        9.52%

</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 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.

(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 December 31, 1998 compared to three months ended
December 31, 1997


 Interest Income and Loan Portfolio

       Interest  revenue increased 35% to $2.6  million  for  the
period  ended December 31, 1998, from $1.9 million for the period
ended  December  31,  1997.  The net finance  receivable  balance
totaled  $36.5 million at December 31, 1998, an increase  of  22%
from  the  $29.8 million at December 31, 1997. The gross  finance
receivable balance increased 29% to $57.8 million at December 31,
1998  from $45.0 million at December 31, 1997. The primary reason
interest  revenue increased was the increase in  the  outstanding
loan  portfolio. The gross portfolio yield increased from  22.01%
for  the period ended December 31, 1997 to 23.37% for the  period
ended  December  31, 1998. The primary reason  that  net  finance
receivables increased was the opening of two additional offices.

 Computer Software Business

   Sales  for  the period ended December 31, 1998  were  $121,861
compared  to $105,175 for the period ended December 31, 1997,  an
increase  of 16%. This increase was primarily due to an  increase
in new installations during the period ended December 31, 1998.

 Operating Expenses

       Operating expenses, excluding provision for credit  losses
and  interest  expense, increased to $1,259,955  for  the  period
ended  December  31,  1998 from $906,539  for  the  period  ended
December   31,  1997.  This  increase  of   39%   was   primarily
attributable to the opening of additional branches which included
additional staffing costs, depreciation and related expenses.

 Interest Expense

      Interest expense increased to $560,688 for the period ended
December  31,  1998 as compared to $534,444 for the period  ended
December  31,  1997.  This increase was due  to  an  increase  in
average  outstanding  borrowings  from  $22.4  million  to  $28.5
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 9.56% for the period ended December 31,  1997
to 7.88% for the period ended December 31, 1998 .

<PAGE> 12

Nine months ended December 31, 1998 compared to nine months ended
December 31, 1997


  Interest Income and Loan Portfolio

       Interest  revenue increased 29% to $7.0  million  for  the
period  ended December 31, 1998, from $5.4 million for the period
ended  December  31,  1997.  The net finance  receivable  balance
totaled  $36.5 million at December 31, 1998, an increase  of  22%
from  the  $29.8 million at December 31, 1997. The gross  finance
receivable balance increased 29% to $57.8 million at December 31,
1998  from $45.0 million at December 31, 1997. The primary reason
interest  revenue increased was the increase in  the  outstanding
loan  portfolio. The gross portfolio yield increased from  21.95%
for  the period ended December 31, 1997 to 22.12% for the  period
ended  December  31, 1998. The primary reason  that  net  finance
receivables increased was the opening of two additional offices.


 Computer Software Business

   Sales  for  the period ended December 31, 1998  were  $339,190
compared  to $326,915 for the period ended December 31, 1997,  an
increase of 4%. This increase was primarily due to an increase in
new installations during the period ended December 31, 1998.

 Operating Expenses

       Operating expenses, excluding provision for credit  losses
and  interest  expense, increased to $3,330,253  for  the  period
ended  December  31, 1998 from $2,622,795 for  the  period  ended
December   31,   1997.  This  increase  of  27%   was   primarily
attributable to the opening of additional branches which included
additional staffing costs, depreciation and related expenses.


 Interest Expense

       Interest  expense increased to $1,799,331 for  the  period
ended  December 31, 1998 as compared to $1,534,632 for the period
ended December 31, 1997. This increase was due to an increase  in
average  outstanding  borrowings  from  $21.3  million  to  $27.3
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 9.63% for the period ended December 31,  1997
to 8.80% for the period ended December 31, 1998 .

<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 batches its Contracts  into  pools  for
purposes  of  establishing reserves for losses.  Each  such  pool
consists of the loans processed by a Company branch office during
a fiscal quarter.  The average pool consists of 68 Contracts with
an  aggregate initial principal amount of approximately $523,815.
As of December 31, 1998, the Company had 190 active pools.

   The  Company  pools Contracts according to  branch  locations,
which  are located in the States of Florida and Georgia.  Pooling
by  branch  and  quarter  allows  the  Company  to  evaluate  the
different  markets where the branches operate.  The  pools  allow
the  Company to evaluate the performance of the branch personnel,
who  are  given  the  responsibility  at  the  branch  level   to
underwrite and service their loan portfolio.

   A  pool retains an amount equal to 100% of the discount  as  a
reserve  for  credit losses. In situations where 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.  If the reserve for credit losses established
at  inception  is  exhausted  for  a  pool  which  is  not  fully
liquidated,  then a charge to income will be used to  reestablish
the  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 December 31, 1998, the Company
had established reserves for losses on Contracts of $7,736,302 or
18% of net outstanding receivables.

   Because of the small number of direct consumer loans currently
outstanding, a reserve for losses is established at the time  the
loan  is  made.  As  of  December  31,  1998,  the  Company   had
established reserves for losses on direct loans of $76,748 or  5%
of  net  outstanding receivables. When the volume of  such  loans
increases,  the Company intends to utilize a pooling  arrangement
similar to that used in connection with Contracts in establishing
reserves.   As  of  December  31,  1998,  the  Company  had   not
experienced  material  losses  under  its  direct  consumer  loan
program.

   The  provision for credit losses was $238,965  for  the  three
month  period ended December 31, 1998 and $599,234 for  the  nine
month period ended December 31, 1998 as compared to $250,115  for
the  three month period ended December 31, 1997 and $530,540  for
the  nine month period ended December 31, 1997. This increase was
due  primarily to the 22% increase in the net finance  receivable
balance as of December 31, 1998 compared to December 31, 1997.

   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:

<PAGE> 14
<TABLE>
<CAPTION>

                                Nine Months Ended      Nine Months Ended
                                December 31, 1998      December 31, 1997
                               -------------------------------------------
<S>                             <C>            <C>     <C>          <C>
Contracts
Gross Balance Outstanding        $55,955,413            $43,891,053

                                    Dollar                 Dollar
Delinquencies                       Amount    Percent*     Amount    Percent*
                                 -----------  --------   ----------  --------
30 to 59 days                     $1,905,083     3.40%   $2,002,041    4.56%
60 to 89 days                        557,096     1.00%      649,417    1.48%
90   +  days                         328,965     0.59%      248,104    0.57%
                                 -----------     -----   ----------    -----
Total Delinquencies               $2,791,144             $2,899,562

*Total Delinquencies as
 percent of outstanding balance                  4.99%                 6.61%

Direct Loans
Net Balance Outstanding           $1,453,640               $893,655

Delinquencies

30 to 59 days                        $12,711     0.87%      $12,336    1.38%
60 to 89 days                          4,445     0.31%        1,087    0.12%
90 + days                              3,535     0.24%          682    0.08%
                                  ----------    ------     ---------   -----
Total Delinquencies                  $20,691                $14,105

*Total Delinquencies as a
percent of outstanding balance                   1.42%                 1.58%

</TABLE>

Income Taxes

  The Company's effective tax rate remained relatively consistent
at 38.95% and 38.72% for the three and nine months ended December
31, 1998, as compared to 39.67% and 39.13% for the three and nine
months ended December 31, 1997, respectively.

<PAGE> 15

Liquidity and Capital Resources

The  Company's cash flows for the nine months ended December  31,
1998 and December 31, 1997 are summarized as follows:

<TABLE>
<CAPTION>
                                  Nine months ended    Nine  months ended
                                     December 31,          December 31,
                                        1998                   1997
                                 -------------------  --------------------
  <S>                               <C>                    <C>
  Cash provided by (used in):
       Operating Activities -        $1,083,054             $  893,402
       Investing Activities -
        (primarily purchase of
          Contracts)                 (4,718,242)            (4,483,211)
       Financing Activities -         3,723,883              3,594,843

       Net increase in cash              88,695                  5,034

</TABLE>

     The Company's primary use of working capital during the nine
months ended December 31, 1998 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. On September  18,
1998 the Company increased its line of credit to $35 million  and
also  extended the maturity date to June 3, 2001. As of  December
31,  1998  the  Company had approximately $7.9 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 or both.


Future Expansion

      The  Company currently operates fourteen branch  locations,
twelve  in the State of Florida and two in the State of  Georgia.
Each  Florida branch office is licensed with the State to acquire
indirect  installment sales finance contracts  and  to  originate
direct consumer loans. To date the Georgia branch offices do  not
purchase direct consumer loans. 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
none 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, either with BankAmerica or another lender.

   The Company believes that opportunity for growth continues  to
exist  in  the  States  of  Florida  and  Georgia  and  for   the
foreseeable future intends generally to concentrate its expansion
activities in these States. The Company has identified Pensacola,
Florida  and Macon, Georgia as areas where it may open additional
branch offices during calendar year  2000.

<PAGE> 16

Impact of 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.

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  80% complete on the remediation phase and expects to complete
software  reprogramming and replacement no later than  March  31,
1999. Once software is reprogrammed or replaced for a system, the
Company  begins testing and implementation. To date  the  Company
has  completed 60% of its testing and has implemented 35% of  its
remediated  systems.  Completion of the  testing  phase  for  all
significant  systems  is expected by March  31,  1999,  with  all
remediated systems fully tested and implemented by June 30, 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 $100,000 and is  being
funded  through  operating cash flows. To date, the  Company  has
incurred approximately $60,000 related to all phases of the  Year
2000 project. Of the total remaining project costs, approximately
$15,000  is  attributable to the purchase  of  new  software  and
operating  equipment,  which will be capitalized.  The  remaining
$25,000  relates to repair of hardware and software and  will  be
expensed as incurred.

   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  March
1999 and determine whether such a plan is necessary.

<PAGE> 17

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> 18

                   Part II - Other Information


Item 1.   Legal Proceedings - None

Item 2.   Changes in Securities - 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.

<PAGE> 19
                                
                           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
February 12, 1999.
                                
                                
                    NICHOLAS FINANCIAL, INC.
                          (Registrant)


  Date: February 12, 1999       /s/ Peter L. Vosotas
                                ----------------------------
                                Peter L. Vosotas
                                Chairman, President, Chief
                                Executive Officer
                                (Principal Executive Officer)


  Date: February 12, 1999       /s/ Ralph T. Finkenbrink
                                -----------------------------
                                Ralph T. Finkenbrink
                                (Principal Financial Officer
                                 and Accounting Officer)

<PAGE> 20

                          EXHIBIT INDEX

    Exhibit      Document
    -------     ----------
    none