<PAGE> 1
                                
         UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                       Washington, DC  20549
                                
                            FORM 10-QSB
                                
X     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
 SECURITIES ACT OF 1934 FOR THE PERIOD ENDED SEPTEMBER 30, 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                         34619
 (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 October 33st, 1997 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 September 30, 1997......3

Condensed Consolidated Statements of Income for the three and
     six months ended September 30, 1997 and 1996..................4

Condensed Consolidated Statements of Cash Flows for the
     six months ended September 30, 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........................................13

Item 2.  Changes in Securities....................................13

Item 3.  Defaults upon Senior Securities..........................13

Item 4.  Submission of Matters to a Vote of Security Holders......13

Item 5.  Other Information........................................13

Item 6.  Exhibits and Reports on Form 8-K.........................13

         Signatures...............................................14

         Index of Exhibits........................................15

         Exhibit  1.1- Statement Regarding Computation of 
          Per Share Earnings......................................16


<PAGE> 3

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


                                                   September 30,
                                                       1997
                                                  ---------------
<S>                                               <C>
Assets                                                          
Cash                                               $      94,112
Finance receivables, net                              28,497,200
Accounts receivable                                       14,293
Prepaid expenses and other assets                        459,815
Property and equipment, net                              192,315
Deferred income taxes                                    484,828
                                                   --------------
Total assets                                         $29,742,563
                                                   ==============
Liabilities                                                     
Line of credit                                       $19,930,594
Notes payable - related party                          1,741,595
Accounts payable                                       1,253,247
Income taxes payable                                     108,681
Deferred revenues                                        146,133
Other liabilities                                         26,582
                                                   --------------
                                                      23,206,832
                                                                
Shareholders' equity                                            
Preferred stock, no par: 5,000,000 shares                       
authorized;                                                    -
none issued and outstanding
Common stock, no par: 50,000,000 shares                         
authorized; 2,347,513  shares issued and               3,746,994
outstanding
Retained earnings                                      2,788,737
                                                   --------------
                                                       6,535,731
                                                   --------------
Total liabilities and shareholders' equity           $29,742,563
                                                   ==============
</TABLE>

See accompanying notes.

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


                                  Three months ended           Six months ended
                                      September 30               September 30
                                   1997         1996          1997         1996
                              ----------------------------------------------------
<S>                            <C>          <C>          <C>          <C>
Revenue:
Interest income on 
finance receivables             $1,847,121   $1,500,528   $3,538,929   $2,848,593
Sales                              112,259      122,969      221,740      236,680
                              ----------------------------------------------------
                                 1,959,380    1,623,497    3,760,669    3,085,273
Expenses:
Cost of sales                       23,259       25,091       44,636       47,556
Marketing                           91,786       61,827      159,406      121,415
Administrative                     759,029      575,716    1,458,214    1,123,464
Provision for credit losses        148,103      131,808      280,425      186,121
Deferred compensation expense            -            -            -       29,947
Depreciation and amortization       28,500       21,422       54,000       42,187
Interest expense                   500,954      423,972    1,000,188      818,602
                              ----------------------------------------------------
                                 1,551,631    1,239,836    2,996,869    2,369,292
                              ----------------------------------------------------
Operating income before 
income taxes                       407,749      383,661      763,800      715,981

Income tax expense (benefit):
Current                            169,087      150,052      370,592      289,835
Deferred                           (11,461)      (3,110)     (73,461)     (17,029)
                              ----------------------------------------------------
                                   157,626      146,942      297,131      272,806
                              ----------------------------------------------------
Net Income                        $250,123     $236,719     $466,669     $443,175
                              ====================================================
Net Income per common and 
 common equivalent share             $0.11        $0.11        $0.20        $0.21
                              ====================================================
Weighted average number of 
 common and common equivalent 
 shares                          2,335,133    2,119,253    2,332,657    2,116,832
                              ====================================================
</TABLE>

See accompanying notes.

<PAGE> 5
<TABLE>
<CAPTION>        

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

                                       Six months ended September 30
                                            1997              1996
                                      --------------------------------
<S>                                   <C>               <C>
Operating activities
Net income                             $   466,669       $    443,175
Adjustments to reconcile net 
 income to net cash provided by 
 operating activities:
 Depreciation of property and equipment     54,000             40,500
 Provision for credit losses               280,425            186,121
 Amortization of intangible assets 
 and deferred loan costs                         -              9,138
 Deferred compensation expense                   -             29,947
 Deferred income taxes                     (73,461)           (17,029)
Changes in operating assets and 
 liabilities:
 Accounts receivable                        17,931              2,581
 Prepaid expenses and other assets         (96,244)          (159,274)
 Deferred revenues                         (27,881)            21,706
 Accounts payable                          (20,777)           (41,496)
 Other liabilities                          (1,228)               795
 Income taxes payable                       35,754            (84,164)
                                      --------------------------------- 
Net cash provided by operating 
  activities                               635,188            432,000

Investing activities
Increase in finance receivables, 
  net of principal collected            (2,854,534)        (2,316,821)
Purchase of property and equipment         (63,974)           (49,342)
                                      ---------------------------------
Net cash used by investing activities   (2,918,508)        (2,366,163)

Financing activities
Net proceeds from notes payable-
  related party and line of credit 
  borrowings                             2,235,500          1,554,791
Proceeds from sale of the Company's 
  common stock                              33,784             17,028
                                      --------------------------------
Net cash provided by financing 
  activities                             2,269,284          1,571,819
                                      --------------------------------
Net decrease in cash                       (14,036)          (362,344)

Cash, beginning of period                  108,148            490,791
                                      --------------------------------
Cash, end of period                        $94,112           $128,447
                                      ================================
</TABLE>

See accompanying notes.

<PAGE> 6

                     Nicholas Financial, Inc.
                                
     Notes to the Condensed Consolidated Financial Statements
                                
                           (Unaudited)
                                
                       September 30, 1997
                                

1. Basis of Presentation

The  accompanying  unaudited  condensed   consolidated  financial
statements  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 six
month  periods  ended  September  30, 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

Net Income per share is based upon the weighted average number of
shares  outstanding,  adjusted  for the  dilutive effect of stock
options  and  warrants.  Supplementary  earnings per  share  data
described in  APB  15  is  not materially  different from the net
income per share which is presented.

3. Finance Receivables

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


<TABLE>
       <S>                                     <C>
        Finance receivables, gross contract     $43,023,529
        Less:
             Unearned interest                   (9,560,531)
                                               --------------             
                                                 33,462,998
             Nonrefundable dealer reserves       (3,586,482)
             Allowance for credit losses         (1,379,316)
                                               --------------
             Finance receivables, net           $28,497,200
                                               ==============
</TABLE>

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


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.


<PAGE> 7



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 the
unconditional guarantee of it's subsidiaries, Canadian parent and
Peter L. Vosotas the majority shareholder.


6. Notes Payable - Related Party

Notes payable consisted of the following:

<TABLE> 
<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 $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,
at  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  September 30, 1997 to $250,123 from $236,719 for the three
month  period  ended September 30, 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 September 30, 1996,
substantially offset the items that favorably impacted  earnings.
The Company's NDS subsidiary did not contribute significantly  to
consolidated   operations  in  the  three  month  periods   ended
September 30, 1997 or 1996.

   Consolidated  net income increased for the  six  month  period
ended  September 30, 1997 to $466,669 from $443,175 for  the  six
month  period  ended September 30, 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 September 30, 1996,
substantially offset the items that favorably impacted  earnings.
The Company's NDS subsidiary did not contribute significantly  to
consolidated operations in the six month periods ended  September
30, 1997 or 1996.

<TABLE>
<CAPTION>
                            Three Months Ended September 30,  Six Months Ended September 30,
                                   1997         1996               1997          1996
                           ------------------------------------------------------------------
<S>                           <C>           <C>               <C>           <C>
Average Net Finance
Receivables (1)                $32,879,182   $23,564,289       $32,299,376   $22,948,376

Average Indebtedness (2)        21,122,189    16,621,774        20,700,022    16,050,685

Total Revenues                   1,847,121     1,500,528         3,538,929     2,848,593

Interest Expense                   500,954       423,972         1,000,188       818,602
                           ----------------------------------------------------------------
Net Interest Income              1,346,167     1,076,556         2,538,741     2,029,991

Gross Portfolio Yield (3)           22.47%        25.47%            21.91%        24.83%

Average Cost of
Borrowed Funds (2)                   9.49%        10.20%             9.66%        10.20%
                           ----------------------------------------------------------------
Net Interest Spread (4)             12.98%        15.27%            12.25%        14.63%

Net Portfolio Yield (3)             16.38%        18.27%            15.72%        17.69%

Write-off to Liquidation (5)        10.98%        12.04%            10.30%        11.31%

Net Charge-Off Percentage (6)       10.13%        12.46%             9.36%        11.66%
</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> 9

Three  months  ended September 30, 1997 compared to three  months
ended September 30, 1996

 Interest Income and Loan Portfolio

       Interest  revenue increased 23% to $1.8  million  for  the
period ended September 30, 1997, from $1.5 million for the period
ended  September  30,  1996. The net finance  receivable  balance
totaled $28.5 million at September 30, 1997, an increase  of  39%
from  the $20.5 million at September 30, 1996. The gross  finance
receivable  balance increased 41% to $43.0 million  at  September
30,  1997  from $30.6 million at September 30, 1996. The  primary
reason  interest  revenue  increased  was  the  increase  in  the
outstanding  loan portfolio offset in part by a decrease  in  the
gross  portfolio yield. The gross portfolio yield decreased  from
25.47% for the period ended September 30, 1996 to 22.47% for  the
period ended September 30, 1997. This decrease was caused by  the
fact  that for contracts purchased during the last four quarters,
the  Company, has chosen to reclassify 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. Also the Company has purchased contracts that represent
newer  used  vehicles  that carry a lower  stated  APR  than  the
historical  average  of contracts purchased. The  primary  reason
that  net  finance receivables increased was the opening  of  two
additional offices.

 Computer Software Business

   Sales  for  the period ended September 30, 1997 were  $112,259
compared to $122,969 for the period ended September 30,  1996,  a
decrease of  9%. This decrease was primarily due to a decrease in
new installations during the period ended September 30, 1997.

 Operating Expenses

       Operating expenses, excluding provision for credit losses,
stock  compensation  expense and interest expense,  increased  to
$902,574  for  the period ended September 30, 1997 from  $684,056
for  the period ended September 30, 1996. This increase  of   32%
was primarily attributable  to the opening of additional branches
which  included  additional  staffing  costs,  depreciation   and
related expenses.

 Interest Expense

      Interest expense increased to $500,954 for the period ended
September  30, 1997 as compared to $423,972 for the period  ended
September  30,  1996. This increase was due  to  an  increase  in
average  outstanding  borrowings  from  $16.6  million  to  $21.1
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 10.20% for the period ended September 30,
1996 to 9.49% for the period ended September 30, 1997 .

<PAGE> 10

Six  months ended September 30, 1997 compared to six months ended
September 30, 1996


  Interest Income and Loan Portfolio

       Interest  revenue increased 24% to $3.5  million  for  the
period ended September 30, 1997, from $2.8 million for the period
ended  September  30,  1996. The net finance  receivable  balance
totaled $28.5 million at September 30, 1997, an increase  of  39%
from  the $20.5 million at September 30, 1996. The gross  finance
receivable  balance increased 41% to $43.0 million  at  September
30,  1997  from $30.6 million at September 30, 1996. The  primary
reason  interest  revenue  increased  was  the  increase  in  the
outstanding  loan portfolio offset in part by a decrease  in  the
gross  portfolio yield. The gross portfolio yield decreased  from
24.83% for the period ended September 30, 1996 to 21.91% for  the
period ended September 30, 1997. This decrease was caused by  the
fact  that for contracts purchased during the last four quarters,
the  Company, has chosen to reclassify 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. Also the Company has purchased contracts that represent
newer  used  vehicles  that carry a lower stated  APR   than  the
historical  average of contracts purchased by  the  Company.  The
primary  reason  that net finance receivables increased  was  the
opening of two additional offices.


 Computer Software Business

   Sales  for  the period ended September 30, 1997 were  $221,740
compared to $236,680 for the period ended September 30,  1996,  a
decrease of 6%. This decrease was primarily due to a decrease  in
new installations during the period ended September 30, 1997.

 Operating Expenses

       Operating expenses, excluding provision for credit losses,
stock  compensation  expense and interest expense,  increased  to
$1,716,256  for  the  period  ended  September  30,   1997   from
$1,334,621 for the period ended September 30, 1996. This increase
of  29%  was primarily attributable  to the opening of additional
branches  which included additional staffing costs,  depreciation
and related expenses.

 Interest Expense

       Interest  expense increased to $1,000,188 for  the  period
ended  September 30, 1997 as compared to $818,602 for the  period
ended September 30, 1996. This increase was due to an increase in
average  outstanding  borrowings  from  $16.1  million  to  $20.7
million  during  the  comparable  periods.  The  impact  of  this
increase  was offset, in part by a decrease in  the average  cost
of  funds borrowed from 10.20% for the period ended September 30,
1996 to 9.66% for the period ended September 30, 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 $477,000.
As of September 30, 1997, the Company had 138 active pools.

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

   A pool retains an amount equal to 100% of the discount into  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 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  September  30,  1997,  the
Company  had  established reserves for  losses  on  Contracts  of
$4,910,953, 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  September  30,  1997,  the  Company  had
established reserves for losses on direct loans of $54,845 or  6%
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  September  30,  1997,  the  Company  had  not
experienced  material  losses  under  its  direct  consumer  loan
program.

   The  provision for credit losses was $148,103  for  the  three
month  period ended September 30, 1997 and $280,425 for  the  six
month period ended September 30, 1997 as compared to $131,808 for
the  three month period ended September 30, 1996 and $186,121 for
the  six month period ended September 30, 1996. This increase was
due  primarily to the 39% increase in the net finance  receivable
balance as of September 30, 1997 compared to September 30, 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>

                                    Six Months Ended               Six Months Ended
                                   September 30, 1997             September 30, 1996
                                ------------------------       ------------------------
<S>                             <C>   <C>       <C>            <C>   <C>       <C>
Contracts
Gross Balance Outstanding              $42,020,250                    $29,884,667

                                 Dollar                         Dollar
Delinquencies                    Amount       Percent*          Amount       Percent*
                                ------------------------       ------------------------
30 to 59 days                    $2,004,205      4.77%          $1,533,922      5.13%
60 to 89 days                       460,944      1.10%             252,658      0.85%
90   +  days                        133,926      0.32%             104,019      0.35%
                                ------------------------       ------------------------
Total Delinquencies              $2,599,075                     $1,890,599

*Total Delinquencies as
 percent of outstanding balance                  6.19%                         6.33%

Direct Loans
Net Balance Outstanding                $   839,689                    $  607,457

Delinquencies

30 to 59 days                    $    3,542      0.42%          $   17,711     2.92%
60 to 89 days                         3,691      0.44%                   0     0.00%
90 + days                             1,903      0.23%                   0     0.00%
                                ------------------------       -----------------------
Total Delinquencies              $    9,136                     $   17,711

*Total Delinquencies as a
percent of outstanding balance                   1.09%                         2.92%

</TABLE>

Income Taxes

  The Company's effective tax rate remained relatively consistent
at 38.66% and 38.90% for the three and six months ended September
30,  1997, as compared to 38.30% and 38.10% for the three and six
months ended September 30, 1996, respectively.

<PAGE> 13

Liquidity and Capital Resources

The  Company's cash flows for the six months ended September  30,
1997 and September 30, 1996 are summarized as follows:

<TABLE>
<CAPTION>
                                     Six months ended     Six months ended
                                       September 30,        September 30,
                                            1997                1996
                                    ------------------   -------------------
 <S>                                    <C>                <C>
  Cash provided by (used in):
   Operating Activities -                $  635,188         $  432,000
   Investing Activities -
    (primarily purchase of Contracts)    (2,918,508)        (2,366,163)

   Financing Activities                   2,269,284          1,571,819

  Net(decrease) in cash                     (14,036)          (362,344)

</TABLE>

      The Company's primary use of working capital during the six
months  ended September 30, 1997 was the funding of the  purchase
of  Contracts.  The Contracts were financed substantially through
borrowings on the Company's Line of credit. The line of credit is
secured  primarily  by  Contracts, and available  borrowings  are
based  on  a percentage of qualifying Contracts. As of  September
30,  1997  the Company had approximately $10.1 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 and long-term funding needs.


Future Expansion

      The  Company currently operates thirteen branch  locations,
eleven  in the State of Florida and two in the State of  Georgia.
The  Company  expects to open its fourteenth branch in  Marietta,
Georgia within 30 days.

      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, it will be necessary for the Company  to
open  additional branch offices and 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   primarily   there.   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 1998.

<PAGE> 14

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  - On July 17 the Company  filed
              Form 8-K in connection with the signing of amendment
              #7 dated  July  11, 1997  to it's  Security and Loan
              Agreement dated March 31, 1993.

              Reports on Form 8-K- On September 5, 1997 the Company
              filed Form 8-K announcing a one for three stock split
              effective  for  all  shareholder's  of  record  as of
              September 5, 1997.
                                
<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
October 31, 1997.
                                
                                
                    NICHOLAS FINANCIAL, INC.
                          (Registrant)


  Date: October 31, 1997        /s/ Peter L. Vosotas
                                Peter L. Vosotas
                                Chairman, President, Chief Executive Officer
                                (Principal Executive Officer)


  Date: October 31, 1997         /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

<PAGE> 18

<TABLE>
<CAPTION>

                    Nicholas Financial, Inc.
                           Exhibit 1.1
                                
         Schedule for Computation of Earnings Per Share
                                
                           (Unaudited)
                                
                                
                                    Three Months              Six Months
                                Ended September 30,      Ended September 30,
                                  1997        1996         1997        1996
<S>                             <C>         <C>          <C>         <C>   
                              ---------------------------------------------------
Net income                          250,123     236,719     466,669      443,175
                              ===================================================
Weighted average number of                                   
 common shares outstanding
 during the period                2,335,133   1,957,549   2,332,657    1,955,128

 Add: Primary common equivalent
 shares determined using the 
 "treasury stock" method 
 representing shares issuable
 upon exercise of stock option
 and warrants                             -     161,704           -      161,704
                              ---------------------------------------------------

Weighted average number of                                      
 shares used in Primary                 
 EPS calculation                  2,335,133   2,119,253   2,332,657    2,116,832
                              ===================================================
 Add: Fully Diluted common
   equivalent shares determined
   using the "treasury stock"
   method representing shares
  	issuable upon exercises of 
  	stock options and warrants             -     161,704           -      161,704
                              ---------------------------------------------------
Weighted average number of                                      
  shares used in Fully Diluted
  EPS calculation                 2,335,133   2,119,253   2,332,657    2,116,832
                              ===================================================
Primary Earnings Per Share            $0.11       $0.11       $0.20        $0.21
                              ===================================================
Fully Diluted Earnings 
  Per Share                           $0.11       $0.11       $0.20        $0.21
                              ===================================================

</TABLE>