<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, 1997



    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)

                          (813) 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 31, 1998 there were 2,354,346 shares of common
                        stock outstanding
                                
 This Form 10-QSB consists of 18 pages. Exhibits are indexed at
                            page 17.

<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, 1997..............3

Condensed Consolidated Statements of Income for the three and
     nine months ended December 31, 1997 and 1996.........................4

Condensed Consolidated Statements of Cash Flows for the
     nine months ended December 31, 1997 and 1996.........................5

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

Item 2. Management's Discussion and Analysis of the Financial
        Condition and Results of Operations...............................8

Part II. Other Information

Item 1.  Legal Proceedings...............................................15

Item 2.  Changes in Securities...........................................15

Item 3.  Defaults upon Senior Securities.................................15

Item 4.  Submission of Matters to a Vote of Security Holders.............15

Item 5.  Other Information...............................................15

Item 6.  Exhibits and Reports on Form 8-K................................15

         Signatures......................................................16

         Index of Exhibits...............................................17

         Exhibit 1.1 - Statement Regarding Computation 
                       of Per Share Earnings.............................18

         Exhibit 2.1 - Reports on Form 8-K - Incorporated by reference

<PAGE> 3
<TABLE>
<CAPTION> 
                     Nicholas Financial, Inc.

               Condensed Consolidated Balance Sheet

                            (Unaudited)

                                                   December 31,
                                                       1997
                                                  ---------------
<S>                                               <C>
Assets
Cash                                               $   113,182
Finance receivables, net                            29,794,264
Accounts receivable                                     15,742
Prepaid expenses and other assets                      384,641
Property and equipment, net                            188,840
Deferred income taxes                                  740,778
                                                   ------------
Total assets                                       $31,237,447
                                                   ============

Liabilities
Line of credit                                     $21,230,594
Notes payable - related party                        1,741,595
Accounts payable                                     1,248,559
Income taxes payable                                    36,281
Deferred revenues                                      206,637
Other liabilities                                       23,682
                                                   ------------
                                                    24,487,348

Shareholders' equity
Preferred stock, no par: 5,000,000 shares
authorized;none issued and outstanding                       -
Common stock, no par: 50,000,000 shares
authorized; 2,357,013  shares issued and
outstanding                                          3,772,553
Retained earnings                                    2,977,546
                                                   ------------
                                                     6,750,099
                                                   ------------
Total liabilities and shareholders' equity         $31,237,447
                                                   ============
See accompanying notes.
</TABLE>
<PAGE> 4

<TABLE>
<CAPTION>
                    Nicholas Financial, Inc.

            Condensed Consolidated Statements of Income

                            (Unaudited)


                                          Three months ended         Nine months ended
                                               December 31               December 31
                                            1997        1996         1997         1996
                                        ---------------------------------------------------
<S>                                    <C>          <C>          <C>          <C>
Revenue:
 Interest income on 
    finance receivables                 $1,898,889   $1,344,454   $5,437,818   $4,192,414
 Sales                                     105,175      112,301      326,915      349,613
                                        ---------------------------------------------------
                                         2,004,064    1,456,755    5,764,733    4,542,027
Expenses:
 Cost of sales                              25,531       23,053       70,166       70,609
 Marketing                                  77,101       59,708      236,507      181,122
 Administrative                            782,907      602,004    2,241,122    1,725,467
 Provision for credit losses               250,115      177,000      530,540      363,121
 Deferred compensation expense                   -      (29,347)           -          600
 Depreciation and amortization              21,000       20,843       75,000       63,030
 Interest expense                          534,444      395,867    1,534,632    1,214,469
                                        ---------------------------------------------------
                                         1,691,098    1,249,128    4,687,967    3,618,418
                                        ---------------------------------------------------
Operating income before income taxes       312,966      207,627    1,076,766      923,609

Income tax expense (benefit):
 Current                                   380,107      (77,033)     750,699      212,804
 Deferred                                 (255,950)     159,113     (329,411)     142,083
                                        ---------------------------------------------------
                                           124,157       82,080      421,288      354,887
                                        ---------------------------------------------------
Net Income                                $188,809     $125,547     $655,478     $568,722
                                        ===================================================
Earnings per share - Basic                   $0.08        $0.05        $0.28        $0.27
                                        ===================================================
Earnings per share - Diluted                 $0.08        $0.05        $0.28        $0.26
                                        ===================================================

See accompanying notes.

</TABLE>
<PAGE> 5

<TABLE>
<CAPTION>

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


                                                    Nine months ended December 31
                                                         1997             1996
                                                   -------------------------------
<S>                                                <C>              <C>
Operating activities
Net income                                          $   655,478      $   568,722
Adjustments to reconcile net income 
 to net cash provided by operating activities:
Depreciation of property and equipment                   75,000           60,500
Provision for credit losses                             530,540          363,121
Amortization of intangible assets 
  and deferred loan costs                                     -           16,534
Deferred compensation expense                                 -              600
Deferred income taxes                                  (329,411)         142,083
Changes in operating assets and liabilities:
Accounts receivable                                      16,482            5,721
Prepaid expenses and other assets                       (21,071)         (42,261)
Deferred revenues                                        32,623           14,327
Accounts payable                                        (25,465)        (175,988)
Other liabilities                                        (4,128)          61,455
Income taxes payable                                    (36,646)        (122,082)
                                                   --------------------------------
Net cash provided by operating activities               893,402          892,732

Investing activities
Increase in finance receivables, 
  net of principal collected                         (4,401,712)      (3,261,887)
Purchase of property and equipment                      (81,499)         (74,994)
                                                   --------------------------------
Net cash used by investing activities                (4,483,211)      (3,336,881)

Financing activities
Net proceeds from notes payable-related
  party and line of credit borrowings                 3,535,500          154,791
Proceeds from sale of the Company's common stock         59,343        1,987,352
                                                   --------------------------------
Net cash provided by financing activities             3,594,843        2,142,143
                                                   --------------------------------
Net increase (decrease) in cash                           5,034         (302,006)

Cash, beginning of period                               108,148          490,791
                                                   --------------------------------
Cash, end of period                                    $113,182         $188,785
                                                   ================================
See accompanying notes.
</TABLE>
<PAGE> 6


                     Nicholas Financial, Inc.
                                
     Notes to the Condensed Consolidated Financial Statements
                                
                           (Unaudited)
                                
                        December 31, 1997
                                

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  three  month and
nine month periods  ended December 31,  1997 are not necessarily
indicative  of  the results  that  may  be expected for the year
ended  March 31,  1998.  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, 1997.

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.

3. Finance Receivables

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

<TABLE>
        <S>                                    <C>
         Finance receivables, gross contract    $44,955,850
         Less:
              Unearned interest                  (9,995,142)
                                                ------------
                                                 34,960,708
              Nonrefundable dealer reserves      (3,774,310)
              Allowance for credit losses        (1,392,134)
                                                ------------
         Finance receivables, net               $29,794,264
                                                ============
</TABLE>

The  terms of the receivables range from 6  to 60 months and bear
a weighted average effective interest rate of 24%.
<PAGE> 7


4. Stock Split

Effective  September 5, 1997 the Company consolidated its common
shares  on  a  one  for  three  basis. All information contained
in  this   report  has   been  restated  to  reflect  the  share
consolidation.



5. Line of Credit

The Company has  a $30,000,000 line of credit facility (the Line)
with  BA  Business  Credit,  Inc. which expires on June 30, 2000.
Borrowings under  the  Line  bear interest at the Bank of America
prime rate plus 0.50%. 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.

<TABLE>
<CAPTION>

6. Notes Payable - Related Party

Notes payable consisted of the following:

<S>                                                         <C>
Notes payable, unsecured, with interest at varying rates
up  to  12%,  quarterly and semiannual interest payments
due  through  June  1998,   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 common shares at prices
from $5.00 to $6.00 per share.                               $1,300,000

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 common shares at $8.25 per share.                  200,000

Notes payable, unsecured, interest at 12%, principal and
interest due through May 1998.                                  218,841

Note  payable,  unsecured,  interest  at  12%, quarterly
interest due through August 1998, which time  the entire
principal balance is due.                                        22,754
                                                           -------------
                                                             $1,741,595
                                                           =============
</TABLE>
<PAGE> 8


         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, 1997 to $188,809 from $125,547 for the  three
month  period  ended December 31, 1996. Earnings  were  favorably
impacted by an increase in the outstanding loan portfolio coupled
with  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, 1997  or
1996.

   Consolidated  net income increased for the nine  month  period
ended  December 31, 1997 to $655,478 from $568,722 for  the  nine
month  period  ended December 31, 1996. Earnings  were  favorably
impacted by an increase in the outstanding loan portfolio coupled
with  a  marginal  improvement in the  cost  of  funds.  However,
increased operating expenses and an increase in the provision for
credit losses as compared to the period ended December 31,  1996,
partially offset the items that favorably impacted earnings.  The
Company's  NDS  subsidiary  did not contribute  significantly  to
consolidated operations in the nine month periods ended  December
31, 1997 or 1996.

<TABLE>
<CAPTION>
                                     Three Months Ended December 31,  Nine Months Ended December 31,
                                         1997             1996             1997            1996
                                     ----------------------------------------------------------------
<S>                                  <C>              <C>             <C>             <C>
Average Net Finance Receivables (1)   $34,502,973      $24,322,645     $33,033,908     $23,406,466

Average Indebtedness (2)               22,372,189       15,178,355      21,257,411      15,759,909

Total Revenues                          1,898,889        1,344,454       5,437,818       4,192,414

Interest Expense                          534,444          395,867       1,534,632       1,214,469

Net Interest Income                     1,364,445          948,587       3,903,186       2,977,945

Gross Portfolio Yield (3)                  22.01%           22.11%          21.95%          23.88%

Average Cost of Borrowed Funds (2)          9.56%           10.43%           9.63%          10.27%

Net Interest Spread (4)                    12.46%           11.68%          12.32%          13.61%

Net Portfolio Yield (3)                    15.82%           15.60%          15.75%          16.96%

Write-off to Liquidation (5)               11.02%           11.65%          10.63%          11.43%

Net Charge-Off Percentage (6)               9.33%           11.61%           9.43%          11.64%

</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 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 minus  ending
    receivable balance.

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

<PAGE> 9

Three  months  ended December 31, 1997 compared to  three  months
ended December 31, 1996

Interest Income and Loan Portfolio

   Interest  revenue  increased  41%  to  $1.9  million  for  the
period  ended December 31, 1997, from $1.3 million for the period
ended  December  31,  1996.  The net finance  receivable  balance
totaled  $29.8 million at December 31, 1997, an increase  of  40%
from  the  $21.2 million at December 31, 1996. The gross  finance
receivable balance increased 42% to $45.0 million at December 31,
1997  from $31.6 million at December 31, 1996. The primary reason
interest  revenue increased was the increase in  the  outstanding
loan  portfolio. The gross portfolio yield decreased from  22.11%
for  the period ended December 31, 1996 to 22.01% for the  period
ended  December  31, 1997.  The primary reason that  net  finance
receivables  increased  was  the  opening  of  three   additional
branches  and  increasing  the  transaction  volume  in   several
existing branches.

 Computer Software Business

   Sales  for  the period ended December 31, 1997  were  $105,175
compared  to $112,301 for the period ended December 31,  1996,  a
decrease of  6%. This decrease was primarily due to a decrease in
new installations during the period ended December 31, 1997.

 Operating Expenses

       Operating expenses, excluding provision for credit losses,
stock  compensation  expense and interest expense,  increased  to
$906,539 for the period ended December 31, 1997 from $705,608 for
the  period ended December 31, 1996. This increase of   28%   was
primarily   attributable   to  the opening  of  three  additional
branches. The Company also incurred additional operating expenses
as  the result of increasing its number of regional managers from
two  to  three,  as well as increasing the number of  home-office
personnel.

 Interest Expense

      Interest expense increased to $534,444 for the period ended
December  31,  1997 as compared to $395,867 for the period  ended
December  31,  1996.  This increase was due  to  an  increase  in
average  outstanding  borrowings  from  $15.2  million  to  $22.4
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 10.43% for the period ended December  31,
1996 to 9.56% for the period ended December 31, 1997 .

<PAGE> 10

Nine months ended December 31, 1997 compared to Nine months ended
December 31, 1996


  Interest Income and Loan Portfolio

    Interest  revenue increased 30%  to  $5.4   million  for  the
period  ended December 31, 1997, from $4.2 million for the period
ended  December  31,  1996.  The net finance  receivable  balance
totaled  $29.8 million at December 31, 1997, an increase  of  40%
from  the  $21.2 million at December 31, 1996. The gross  finance
receivable balance increased 42% to $45.0 million at December 31,
1997  from $31.6 million at December 31, 1996. The primary reason
interest  revenue increased was the increase in  the  outstanding
loan  portfolio. The gross portfolio yield decreased from  23.88%
for  the period ended December 31, 1996 to 21.95% for the  period
ended  December 31, 1997. This decrease was caused  by  the  fact
that  for contracts purchased during the last four quarters,  the
Company,  has  reclassified a larger portion of  future  unearned
finance charges (at the time the contract was purchased)  to  the
reserve  for  credit losses as compared to previous quarters.  In
addition,  the  Company  has purchased contracts  that  represent
newer used vehicles that carry a lower rate of interest and at  a
lower discount than the historical average of contracts purchased
by  the  Company. The primary reason that net finance receivables
increased  was the opening of three additional branches  and  the
increased transaction volume in several existing branches.


 Computer Software Business

   Sales  for  the period ended December 31, 1997  were  $326,915
compared  to $349,613 for the period ended December 31,  1996,  a
decrease of 6%. This decrease was primarily due to a decrease  in
new installations during the period ended December 31, 1997.

 Operating Expenses

   Operating expenses, excluding  provision  for  credit  losses,
stock  compensation  expense and interest expense,  increased  to
$2,622,795 for the period ended December 31, 1997 from $2,040,828
for  the  period ended December 31, 1996. This increase  of   29%
was  primarily  attributable to the opening of  three  additional
branches. The Company also incurred additional operating expenses
as  the result of increasing its number of regional managers from
two  to  three,  as well as increasing the number of  home-office
personnel.
 .

 Interest Expense

   Interest  expense  increased  to  $1,534,632 for   the  period
ended  December 31, 1997 as compared to $1,214,469 for the period
ended December 31, 1996. This increase was due to an increase  in
average  outstanding  borrowings  from  $15.8  million  to  $21.3
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 10.27% for the period ended December  31,
1996 to 9.63% for the period ended December 31, 1997 .


<PAGE> 11

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 65 Contracts with
an  aggregate initial principal amount of approximately $458,000.
As of December 31, 1997, the Company had 146 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, 1997, the Company
had  established reserves for losses on Contracts of  $5,166,444,
or 15%  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,  1997,  the  Company   had
established reserves for losses on direct loans of $62,204 or  7%
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,  1997,  the  Company  had   not
experienced  material  losses  under  its  direct  consumer  loan
program.

   The  provision for credit losses was $250,115  for  the  three
month  period ended December 31, 1997 and $530,540 for  the  nine
month period ended December 31, 1997 as compared to $177,000  for
the  three month period ended December 31, 1996 and $363,121  for
the  nine month period ended December 31, 1996. This increase was
due  primarily to the 40% increase in the net finance  receivable
balance as of December 31, 1997 compared to December 31, 1996.

<PAGE> 12

   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>
                                 Nine months Ended       Nine months Ended
                                 December 31, 1997       December  31,1996
                              ----------------------    -------------------

<S>                           <C>  <C>         <C>         <C> <C>       <C>

Contracts
Gross Balance Outstanding           $43,891,053                 $30,671,373

                               Dollar                       Dollar
Delinquencies                  Amount       Percent*        Amount    Percent*
                               ----------------------      ---------------------
30 to 59 days                  $2,002,041       4.56%       $1,407,393    4.59%
60 to 89 days                     649,417       1.48%          311,285    1.01%
90  +  days                       248,104       0.57%          159,333    0.52%
                              -----------------------      ---------------------
Total Delinquencies            $2,899,562                   $1,878,011

*Total Delinquencies as
 percent of outstanding balance                 6.61%                     6.12%

Direct Loans
Net Balance Outstanding             $893,655                    $775,875

Delinquencies

30 to 59 days                  $   12,336       1.38%       $   18,621    2.40%
60 to 89 days                       1,087       0.12%                0    0.00%
90 + days                             682       0.08%                0    0.00%
                             -----------                   ----------
Total Delinquencies            $   14,105                   $   18,621

*Total Delinquencies as a
percent of outstanding balance                  1.58%                     2.40%

</TABLE>

Income Taxes

  The Company's effective tax rate remained relatively consistent
at 39.67% and 39.13% for the three and nine months ended December
31, 1997, as compared to 39.53% and 38.42% for the three and nine
months ended December 31, 1996, respectively.

<PAGE> 13

Liquidity and Capital Resources

The  Company's cash flows for the nine months ended December  31,
1997 and December 31, 1996 are summarized as follows:

<TABLE>
<CAPTION>
                                      Nine months ended    Nine months ended
                                         December 31,         December 31,
                                             1997                 1996
                                      -----------------    -----------------
 <S>                                   <C>                  <C>
  Cash provided by (used in):
    Operating Activities -              $    893,402         $     892,732
    Investing Activities -
    (primarily purchase of Contracts)     (4,483,211)           (3,336,881)

    Financing Activities                   3,594,843             2,142,143

  Net increase (decrease) in cash              5,034              (302,006)

</TABLE>

     The Company's primary use of working capital during the nine
months  ended  December  31, 1997 was funding   the  purchase  of
Contracts.   The  Contracts were financed  substantially  through
borrowings from 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 December 31,
1997  the Company had approximately $8.8 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 or the sale of additional securities
in  the capital markets, will be sufficient to meet its short and
long-term funding needs.


Future Expansion

      The  Company currently operates fourteen branch  locations,
eleven in the State of Florida and three in the State of Georgia.
The  Company expects to evaluate several markets in the southeast
for possible expansion.

      The  Company intends to continue its expansion through  the
purchase of additional Contracts and the expansion of its  direct
consumer loan program.  In order to increase the size of its loan
portfolio of Contracts, the Company believes it will be necessary
to increase the size of its Line of Credit.

      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 those states. The Company has identified Pensacola,
and  Boca  Raton  as areas in Florida and Macon and  Valdosta  as
areas  in  Georgia  where it may open additional  branch  offices
during fiscal 1999.

<PAGE> 14

Impact of Year 2000

     The Company has completed an assessment that it will have to
modify portions of its software so that its computer systems will
function  properly  with respect to dates in the  year  2000  and
thereafter. The total Year 2000 project cost is estimated  to  be
immaterial.  The Company's NDS software subsidiary has  designed,
implemented  and  maintained  all in-house computer  systems.  To
date  the Company has not incurred any material expenses  related
to the  Year 2000 issue and does not expect to incur any material
costs.

      The  project  is  expected to be completed  no  later  than
December  31, 1998, which is prior to any anticipated  impact  on
its   operating   systems.  The  Company   believes   that   with
modifications  to  existing  software  and  conversions  to   new
software,  the  Year  2000 Issue will not  pose  any  significant
operational problems for its computer systems.

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> 15


                   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.

          (b) Reports on  Form  8-K - Effective  December 23, 1997
              the Company's common stock was approved for  listing
              on   the  NASDAQ  SmallCap   System   and  commenced
              trading on December 29, 1997,under the symbol NICKF.

<PAGE> 16

                           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 11, 1998.


                    NICHOLAS FINANCIAL, INC.
                          (Registrant)


  Date: February 11, 1998       /s/ Peter L. Vosotas
                                Peter L. Vosotas
                                Chairman, President, Chief
                                Executive Officer
                                (Principal Executive Officer)


  Date: February 11, 1998       /s/ Ralph T. Finkenbrink
                                Ralph T. Finkenbrink
                                (Principal Financial Officer
                                and Accounting Officer)

<PAGE> 17

                          EXHIBIT INDEX

    Exhibit Document

    1.1   Schedule  for  Computation of Earnings Per Share   
    2.1   Reports on Form 8-K - Incorporated  by reference

<PAGE> 18

<TABLE>
<CAPTION>

                    Nicholas Financial, Inc.
                           Exhibit 1.1

Schedule for Computation of Basic and Diluted Earnings Per Share:

                           (Unaudited)


                                              Three Months             Nine Months
                                            Ended December,31       Ended December,31
                                             1997        1996        1997        1996
                                          ----------------------------------------------
   <S>                                   <C>         <C>           <C>         <C>
    Numerator:                                                      
       Net income                         $188,809    $125,547      $655,478   $568,722
       Numerator for basic earnings
        per share - income Available
        to common stockholders             188,809     125,547       655,478    568,722
    
       Numerator for dilutive earnings
       per share - income Available to
       common stockholders                $188,809    $125,547      $655,478   $568,722
                                                   
    
    Denominator:                                                    
       Denominator for basic earnings
       per share - Weighted average
       shares                            2,353,263   2,299,248     2,339,526  2,069,834
                                                                    
       Effect of dilutive securities:
         Employee stock options (A)          6,229      42,210        14,403     52,737
         Stock warrants (A)                      0           0             0          0
                                         ----------------------------------------------
    Dilutive potential common shares         6,229      42,210        14,403    101,192
     Denominator for diluted earnings
      per share--
       Adjusted weighted-average shares  2,359,492   2,341,458     2,353,929  2,171,026
                                         ==============================================
    Basic earnings per share                 $0.08       $0.05         $0.28      $0.27

    Diluted earnings per share               $0.08       $0.05         $0.28      $0.26
                                                                    
    Footnote A:                                                     
        Options                             87,293      38,833        86,097     14,833
        Warrants                           333,333     333,333       333,333    111,111
                                           
       The options and warrants above 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.

</TABLE>