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, 2002



    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
        SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

       For the transition period from ________ to _________.

                  Commission file number: 0-26680


                     NICHOLAS FINANCIAL, INC.
      (Exact name of registrant as specified in its Charter)


       British Columbia, Canada                   8736-3354
   (State or Other Jurisdiction of             (I.R.S. Employer
     Incorporation or Organization)          Identification No.)

  2454 McMullen Booth Road, Building C
        Clearwater, Florida                         33759
  (Address of Principal Executive Offices)        (Zip Code)

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

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

Indicate  by check mark whether the registrant (1) has filed  all
reports  required  to be filed by Section 13  and  15(d)  of  the
Securities  Exchange Act of 1934 during the preceding  12  months
(or for such shorter periods that the Registrant was required  to
file  such  reports),  and (2) has been subject  to  such  filing
requirements for the past 90 days.  Yes   X      No ____.


 As of October 31st, 2002 there were 5,002,021 shares of common
                       stock outstanding.


<PAGE> 2


                    Nicholas Financial, Inc.
                           Form 10-QSB
                              Index


Part I.   Financial Information                                Page

Item 1.   Financial Statements (Unaudited)Condensed
          Consolidated Balance Sheet as of September 30, 2002....3

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

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

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

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

Item 3.   Disclosures and Controls..............................18


Part II.  Other Information

Item 1.   Legal Proceedings.....................................19

Item 2.   Changes in Securities.................................19

Item 3.   Defaults upon Senior Securities.......................19

Item 4.   Submission of Matters to a Vote of Security Holders...19

Item 5.   Other Information.....................................19

Item 6.   Exhibits and Reports on Form 8-K......................19

          Signatures............................................20

          Exhibit Index.........................................21


<PAGE> 3

Part I. Item 1
                     Nicholas Financial, Inc.
               Condensed Consolidated Balance Sheet
                            (Unaudited)

<TABLE>
<CAPTION>
                                               September 30, 2002
                                             ----------------------
<S>                                            <C>
Assets
Cash                                            $     598,203
Finance receivables, net                           81,518,449
Accounts receivable                                    19,048
Prepaid expenses and other assets                     839,708
Property and equipment, net                           410,000
Deferred income taxes                                 327,338
                                                -------------
Total assets                                    $  83,712,746

Liabilities
Line of credit                                  $  57,533,426
Drafts payable                                        297,796
Notes payable - related party                         649,376
Accounts payable                                    3,088,984
Derivatives                                         2,175,431
Deferred revenues                                     911,337
                                                -------------
Total liabilities                                  64,656,350

Shareholders' equity
Preferred stock, no par: 5,000,000 shares
 authorized;none issued and outstanding                     -
Common stock, no par: 50,000,000 shares
 authorized; 5,010,521 shares issued
 and outstanding                                    4,437,090
Other comprehensive loss                           (2,208,714)
Retained earnings                                  16,828,020
                                                -------------
                                                   19,056,396
                                                -------------
Total liabilities and shareholders' equity      $  83,712,746
                                                =============

See accompanying notes.

</TABLE>
<PAGE> 4

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

<TABLE>
<CAPTION>

                                   Three months ended       Six months ended
                                      September 30,           September 30,
                                    2002        2001        2002        2001
                                 ------------------------------------------------
<S>                            <C>          <C>         <C>          <C>
Revenue:
Interest income on
 finance receivables            $5,492,139   $4,857,907  $10,725,488  $9,389,658
Sales                               92,939       89,922      175,315     189,042
                                ------------------------------------------------
                                 5,585,078    4,947,829   10,900,803   9,578,700
Expenses:
Cost of sales                       25,652       19,873       42,820      43,562
Marketing                          155,860      138,014      309,341     248,471
Administrative                   2,114,689    1,798,052    4,096,548   3,482,578
Provision for credit losses        582,138      427,776    1,129,204     780,425
Depreciation and amortization       42,000       60,000       79,000     105,000
Interest expense                   967,632    1,010,581    1,931,695   2,006,413
                                ------------------------------------------------
                                 3,887,971    3,454,296    7,588,608   6,666,449
                                ------------------------------------------------
Operating income
 before income taxes             1,697,107    1,493,533    3,312,195   2,912,251

Income tax expense:
Current                            508,509      468,024    1,081,758   1,011,146
Deferred                           132,442       95,000      161,117      89,583
                                ------------------------------------------------
                                   640,951      563,024    1,242,875   1,100,729
                                ------------------------------------------------
Net Income                      $1,056,156    $ 930,509  $ 2,069,320 $ 1,811,522
                                ================================================
Earnings per share - basic           $0.21        $0.19        $0.41       $0.38
                                ================================================
Earnings per share - diluted         $0.20        $0.18        $0.39       $0.35
                                ================================================

See accompanying notes.

</TABLE>

<PAGE> 5
                    Nicholas Financial, Inc.
          Condensed Consolidated Statements of Cash Flows
                            (Unaudited)

<TABLE>
<CAPTION>
                                   Six months ended September 30,
                                           2002       2001
                                 ---------------------------------
<S>                                  <C>               <C>
Operating activities
Net income                            $ 2,069,320  $ 1,811,522
Adjustments to reconcile net income
 to net cash provided by
 operating activities:
Depreciation                               79,000      105,000
Provision for credit losses             1,129,204      780,425
Deferred income taxes                     161,117       89,385
Changes in operating assets and
 liabilities:
Accounts receivable                        (4,604)      (2,976)
Prepaid expenses and other assets        (323,055)    (147,312)
Accounts payable                         (291,170)     (30,583)
Drafts payable                           (121,320)           -
Income taxes payable                     (110,116)     (93,819)
Deferred revenues                         255,781       64,690
                                       ------------------------
Net cash provided by operating
 activities                             2,844,157    2,576,332

Investing activities
Increase in finance receivables,
 net of principal collected            (6,580,266)  (4,924,823)
Purchase of property and equipment,
 net of disposals                        (118,151)    (109,625)
                                       ------------------------
Net cash used in investing activities  (6,698,417)  (5,034,448)

Financing activities
Issuance of notes payable -
 related party                            107,094            -
Net proceeds from line of credit        4,260,000    2,200,000
Sale of common stock                       34,130       64,488
                                       ------------------------
Net cash provided by
 financing activities                   4,401,224    2,264,488
                                       ------------------------
Net increase(decrease) in cash            546,964     (193,628)
Cash, beginning of period                  51,239      233,167
                                       ------------------------
Cash, end of period                    $  598,203   $   39,539
                                       ========================
See accompanying notes.

</TABLE>

<PAGE> 6
                     Nicholas Financial, Inc.
     Notes to the Condensed Consolidated Financial Statements
                           (Unaudited)

                       September 30, 2002


1. Basis of Presentation

The   accompanying  unaudited  condensed  consolidated  financial
statements of Nicholas Financial, Inc. (the "Company") have  been
prepared  in  accordance  with  accounting  principles  generally
accepted  in  the United States for interim financial information
and  with  the  instructions  to  Form  10-QSB  pursuant  to  the
Securities and Exchange Act of 1934, as amended in Article 10  of
Regulation  SB.  Accordingly, they do  not  include  all  of  the
information  and  footnotes  required  by  accounting  principles
generally  accepted  in the United States for complete  financial
statements.   In  the  opinion  of  management,  all  adjustments
(consisting  of  normal recurring accruals) considered  necessary
for a fair presentation have been included. Operating results for
the  six  months  ended September 30, 2002  are  not  necessarily
indicative  of  the  results that may be expected  for  the  year
ending  March  31, 2003. For further information,  refer  to  the
condensed consolidated financial statements and footnotes thereto
included in the Company's Annual Report on Form 10-K for the year
ended March 31, 2002.

2. Earnings Per Share

Basic earnings per share excludes any dilutive effects of common
stock equivalents such as options, warrants, and convertible
securities. Diluted earnings per share includes the effects of
dilutive options, warrants, and convertible securities. Basic and
diluted earnings per share have been computed as follows:

<PAGE> 7

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

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

 Numerator for basic earnings per
  share - Net income available
  to common stockholders           $1,056,156  $930,509   $2,069,320  $1,811,522

 Effect of dilutive securities:
    Convertible debt                        -     4,068            -      13,423
                                   ----------------------------------------------
 Numerator for dilutive earnings
  per share - income available
  to common stockholders after
  assumed conversions              $1,056,156  $934,577   $2,069,320  $1,824,945
                                   ==============================================



Denominator:
 Denominator for basic earnings
  per share - weighted
  average shares                   5,010,351  4,875,683    5,004,909   4,756,949

 Effect of dilutive securities:
  Employee stock options             305,659    307,967      324,398     264,676
  Convertible debt                         -     96,618            -     203,865
                                   ---------------------------------------------
 Denominator for diluted earnings
  per share - adjusted weighted-
  average shares and
  assumed conversions              5,316,010  5,280,268    5,329,307   5,225,490
                                   =============================================
 Earnings per share - basic            $0.21      $0.19        $0.41       $0.38
                                   =============================================
 Earnings per share - diluted          $0.20      $0.18        $0.39       $0.35
                                   =============================================

</TABLE>

<PAGE> 8
                    Nicholas Financial, Inc.
     Notes to the Condensed Consolidated Financial Statements
                            (Unaudited)


<TABLE>
<CAPTION>

3. Finance Receivables

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

  <S>                                         <C>
    Finance receivables, gross contract        $129,557,491
    Less:
       Unearned interest                        (31,005,238)
                                               -------------
                                                 98,552,253
       Nonrefundable dealer reserves            (11,952,122)
       Allowance for credit losses               (5,081,682)
                                               -------------
       Finance receivables, net                $ 81,518,449
                                               =============

</TABLE>


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


4. Line of Credit

The  Company has a $75 million Line of Credit facility (the Line)
which  expires  on November 30, 2004. Borrowings under  the  Line
bear  interest at the prime rate plus .25%. The Company also  has
several  LIBOR  pricing options available.   If  the  outstanding
balance falls below $10 million, the Line bears interest  at  the
prime  rate  plus  2.00%. Pledged as collateral for  this  credit
facility  are all of the assets of Nicholas Financial,  Inc.  and
its subsidiaries.


5. Notes Payable - Related Party

The  Company's  notes  payable consist of unsecured notes bearing
interest at  9.5%  with principal and interest due within 30-days
upon demand. The notes totaled $649,376 at September 30, 2002.

<PAGE> 9
                     Nicholas Financial, Inc.
     Notes to the Condensed Consolidated Financial Statements
                            (Unaudited)



6. Derivatives and Hedging

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

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

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

<TABLE>
<CAPTION>

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


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

</TABLE>

<PAGE> 10

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




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

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


Critical Accounting Policy

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


<PAGE> 11





Part I. Item 2

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

   Consolidated net income increased for the three  month  period
ended  September  30, 2002 to $1,056,156 from  $930,509  for  the
three  month  period  ended September  30,  2001.  Earnings  were
favorably  impacted  by  an  increase  in  the  outstanding  loan
portfolio.  The  Company's Nicholas Data Services subsidiary  did
not  contribute significantly to consolidated operations  in  the
three or six month periods ended September 30, 2002 or 2001.


<TABLE>
<CAPTION>
                         Portfolio Summary
                        --------------------


                          Three months ended          Six months ended
                              September 30,             September 30,
                            2002       2001            2002       2001
                       -----------------------------------------------------
<S>                    <C>          <C>           <C>          <C>
Average Net Finance
 Receivables (1)        $97,378,535  $83,284,788   $95,579,869  $81,937,694

Average Indebtedness(2)  57,165,923   50,374,767    56,373,558   50,158,101

Total Finance Revenue(3)  5,492,139    4,857,907    10,725,488    9,389,658

Interest Expense            967,632    1,010,581     1,931,695    2,006,413
                         --------------------------------------------------
Net Finance Revenue       4,524,507    3,847,326     8,793,793    7,383,245

Gross Portfolio Yield(4)     22.56%       23.33%        22.44%       22.92%

Average Cost of
 Borrowed Funds(2)            6.77%        8.02%         6.85%        8.00%
                         --------------------------------------------------
Net Interest Spread(5)       15.79%       15.31%        15.59%       14.92%

Provision for Credit
 Losses as a Percentage
 of Average Net Finance
 Receivables                  2.39%        2.05%         2.36%        1.90%

Net Portfolio Yield(4)       16.19%       16.42%        16.04%       16.12%

Operating Expenses as
 a Percentage of
 Average Net Finance
 Receivables (6)              9.21%        9.17%         9.07%        8.97%


Pre-tax Yield as a
 Percentage of Average
 Net Finance Receivables(7)   6.98%        7.25%         6.97%        7.15%

Write-off to
 Liquidation(8)               9.29%        9.37%         8.60%        8.38%

Net Charge-Off
 Percentage(9)                7.97%        8.24%         7.47%        7.30%

</TABLE>

See accompanying notes.

<PAGE> 12


(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) Does  not include revenue generated by the Company's software
    subsidiary  "NDS". See page 13 for detail on NDS revenue  for
    the   three  months  ended  September  30,  2002  and   2001,
    respectively. See page 14 for detail on NDS revenue  for  the
    six months ended September 30, 2002 and 2001, respectively.

(4) Gross portfolio yield represents total finance revenues as  a
    percentage   of   average  net  finance   receivables.    Net
    portfolio  yield represents net finance revenue income  minus
    the  provision for credit losses as a percentage  of  average
    net finance receivables.

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

(6) Does  not  include  operating expenses  associated  with  the
    Company's  software subsidiary "NDS". See page 13 for  detail
    on  NDS  cost of sales and operating expenses for  the  three
    months  ended September 30, 2002 and 2001, respectively.  See
    page  14  for  detail  on  NDS cost of  sales  and  operating
    expenses  for  the six months ended September  30,  2002  and
    2001, respectively.

(7) Pre-tax  yield represents net portfolio yield minus operating
    expenses as a percentage of interest earning      assets

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

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

<PAGE> 13

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


 Interest Income and Loan Portfolio

       Interest  revenue increased 13% to $5.5  million  for  the
period ended September 30, 2002, from $4.9 million for the period
ended  September  30,  2001. The net finance  receivable  balance
totaled $81.5 million at September 30, 2002, an increase  of  18%
from  the $69.2 million at September 30, 2001. The primary reason
net  finance  receivables  increased  was  the  increase  in  the
receivable  base of several existing branches and the opening  of
three  additional branch locations. The gross finance  receivable
balance  increased  18% to $129.6 million at September  30,  2002
from  $109.8  million at September 30, 2001. The  primary  reason
interest  revenue increased was the increase in  the  outstanding
loan  portfolio. The gross portfolio yield decreased from  23.33%
for  the period ended September 30, 2001 to 22.56% for the period
ended September 30, 2002. The net portfolio yield decreased  from
16.42% for the period ended September 30, 2001 to 16.19% for  the
period  ended  September  30, 2002. The primary  reason  for  the
decrease  in  the  net portfolio yield was  an  increase  in  the
provision  for  credit losses for the period ended September  30,
2002  of  2.39%  of interest earning assets from  2.05%  for  the
period ended September 30, 2001.

 Computer Software Business

   Sales  for  the period ended September 30, 2002  were  $92,939
compared  to $89,922 for the period ended September 30, 2001,  an
increase of 3%. This increase was primarily due to higher revenue
from  the  existing  customer base. Cost of sales  and  operating
expenses  decreased from $105,682 for the period ended  September
30, 2001 to $96,460 for the period ended September 30, 2002.

 Operating Expenses

       Operating expenses, excluding provision for credit  losses
and  interest expense, increased to $2.3 million for  the  period
ended  September 30, 2002 from $2.0 million for the period  ended
September   30,   2001.  This  increase  of  16%  was   primarily
attributable  to  the  additional staffing  of  several  existing
branches, increased general operating expenses and the opening of
three  additional  branch  offices.  Operating  expenses   as   a
percentage  of interest earning assets increased from  9.17%  for
the period ended September 30, 2001 to 9.21% for the period ended
September 30, 2002.

 Interest Expense

      Interest expense decreased to $967,632 for the period ended
September 30, 2002 as compared to $1,010,581 for the period ended
September 30, 2001. The average indebtedness for the period ended
September 30, 2002 increased to $57.2 million compared  to  $50.4
million  for  the period ended September 30, 2001. This  increase
was  offset  by  a  decrease in the average cost  of  outstanding
borrowings from 8.02% during the three months ended September 30,
2001 to 6.77% during the three months ended September 30, 2002.


<PAGE> 14

Six  months  ended September 30, 2002 compared to six months  ended
September 30, 2001


 Interest Income and Loan Portfolio

       Interest  revenue increased 14% to $10.7 million  for  the
period ended September 30, 2002, from $9.4 million for the period
ended  September  30,  2001. The net finance  receivable  balance
totaled $81.5 million at September 30, 2002, an increase  of  18%
from  the $69.2 million at September 30, 2001. The primary reason
net  finance  receivables  increased  was  the  increase  in  the
receivable  base of several existing branches and the opening  of
three  additional branch locations. The gross finance  receivable
balance  increased  18% to $129.6 million at September  30,  2002
from  $109.8  million at September 30, 2001. The  primary  reason
interest  revenue increased was the increase in  the  outstanding
loan  portfolio. The gross portfolio yield decreased from  22.92%
for  the period ended September 30, 2001 to 22.44% for the period
ended September 30, 2002. The net portfolio yield decreased  from
16.12% for the period ended September 30, 2001 to 16.04% for  the
period  ended  September  30, 2002. The primary  reason  for  the
decrease  in  the  net portfolio yield was  an  increase  in  the
provision  for  credit losses for the period ended September  30,
2002  of  2.36%  of interest earning assets from  1.90%  for  the
period ended September 30, 2001.

 Computer Software Business

   Sales  for  the period ended September 30, 2002 were  $175,315
compared to $189,042 for the period ended September 30,  2001,  a
decrease of 7%. This decrease was primarily due to lower  revenue
from  the existing customer base during the first quarter of  the
fiscal year. Cost of sales and operating expenses decreased  from
$204,049 for the period ended September 30, 2001 to $193,166  for
the period ended September 30, 2002.

 Operating Expenses

       Operating expenses, excluding provision for credit  losses
and  interest expense, increased to $4.5 million for  the  period
ended  September 30, 2002 from $3.9 million for the period  ended
September   30,   2001.  This  increase  of  17%  was   primarily
attributable  to  the  additional staffing  of  several  existing
branches, increased general operating expenses and the opening of
3  additional branch offices. Operating expenses as a  percentage
of  interest earning assets increased from 8.97% for  the  period
ended  September 30, 2001 to 9.07% for the period ended September
30, 2002.

 Interest Expense

       Interest expense decreased to $1.9 million for the  period
ended  September  30, 2002 as compared to $2.0 million   for  the
period ended September 30, 2001. The average indebtedness for the
period  ended  September  30,  2002 increased  to  $56.4  million
compared  to  $50.2  million for the period ended  September  30,
2001. This increase was offset by a decrease in the average  cost
of  outstanding borrowings from 8.00% during the six months ended
September 30, 2001 to 6.85% during the six months ended September
30, 2002.

<PAGE> 15

Analysis of Credit Losses

   Because of the nature of the borrowers under the Contracts and
its  direct  consumer  loan program, the  Company  considers  the
establishment  of  adequate reserves  for  credit  losses  to  be
imperative.  The Company segregates its Contracts into pools  for
purposes  of  establishing reserves for losses.  Each  such  pool
consists of the loans purchased by a Company branch office during
a  three  month period. The average pool consists of 72 Contracts
with  an  aggregate  initial principal  amount  of  approximately
$588,726.  As of September 30, 2002, the Company had  395  active
pools.

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

   A pool retains an amount equal to 100% of the discount into  a
reserve  for credit losses. In situations where, at the  date  of
purchase, the discount is determined to be insufficient to absorb
all  potential  losses associated with the  pool,  a  portion  of
future unearned income associated with that specific pool will be
added to the reserves for credit losses until total reserves have
reached the appropriate level. Subsequent to the purchase, if the
reserve  for credit losses is determined to be inadequate  for  a
pool  which is not fully liquidated, then a charge to  income  is
used  to  reestablish  adequate reserves.  If  a  pool  is  fully
liquidated  and  has any remaining reserves, the excess  reserves
are accreted into income.

   In analyzing a pool, the Company considers the performance  of
prior  pools originated by the branch office, the performance  of
prior  Contracts purchased from the dealers whose  Contracts  are
included  in the current pool, the credit rating of the borrowers
under  the Contracts in the pool, and current market and economic
conditions.   Each pool is analyzed monthly to determine  if  the
loss reserves are adequate, and adjustments are made if they  are
determined to be necessary. As of September 30, 2002, the Company
had  established reserves for losses on Contracts of  $16,831,493
or 13.49% of gross outstanding receivables under the Contracts.


<PAGE> 16

<TABLE>
<CATPION>

   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:


                        Three Months Ended        Three Months Ended
                        September 30, 2002         September 30, 2001
                       ------------------------------------------------

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

Contracts
Gross Balance Outstanding  $124,728,292               $105,378,020

                       Dollar                    Dollar
Delinquencies          Amount    Percent*        Amount    Percent*
--------------        -------    ---------      ---------  --------
30 to 59 days        $2,538,101    2.03%       $2,472,836    2.35%
60 to 89 days           733,604    0.59%          733,846    0.70%
90   +  days            325,314    0.26%          242,889    0.23%
                     ----------    -----       ----------    -----
Total Delinquencies  $3,597,019                $3,449,571

*Total Delinquencies
 as percent of
 outstanding balance               2.88%                     3.28%

Direct Loans
Gross Balance Outstanding  $4,829,199                 $4,399,201

Delinquencies
-------------
30 to 59 days           $72,985   1.51%           $76,561    1.74%
60 to 89 days            14,414   0.30%             5,414    0.12%
90 + days                13,150   0.27%             6,187    0.14%
                        -------   -----           -------    -----
Total Delinquencies    $100,549                   $88,162

*Total Delinquencies
 as a percent of
 outstanding balance              2.08%                      2.00%


</TABLE>

  The  provision  for credit losses was $582,138  for  the  three
month  period ended September 30, 2002 and 1,129,204 for the  six
month period ended September 30, 2002 as compared to $427,776 for
the  three month period ended September 30, 2001 and 780,425  for
the  six  month  period ended September 30, 2001.  The  Company's
total  reserve  percentage increased from 12.92% for  the  period
ended March 31, 2002 to 13.15% for the period ended September 30,
2002.  Management  believes  that the  reserve  adjustments  made
during  the three and six month period ended September  30,  2002
are consistent with its reserve methodology.

Income Taxes

  The Company's effective tax rate remained relatively consistent
at  37.77%  and 37.52% for the three and six month periods  ended
September  30, 2002 compared to 37.70% and 37.80% for  the  three
and six months ended September 30, 2001.


<PAGE> 17

Liquidity and Capital Resources

<TABLE>
<CAPTION>

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

                              Six months ended   Six months ended
                                September 30,      September 30,
                                    2002                2001
                             -------------------------------------
<S>                          <C>                 <C>
  Cash provided by (used in):
   Operating Activities -      $  2,844,157         $ 2,576,332

   Investing Activities -
    (primarily purchase of
     Contracts)                  (6,698,417)         (5,034,448)

   Financing Activities           4,401,224           2,264,488
                                 -------------------------------
   Net increase(decrease)in cash    546,964            (193,628)

</TABLE>

      The  Company's  primary use of working capital  during  the
three  months  ended September 30, 2002 was the  funding  of  the
purchase of Contracts.  The Contracts were financed substantially
through  borrowings on the Company's Line of Credit. The Line  of
Credit   is   secured  primarily  by  Contracts,  and   available
borrowings are based on a percentage of qualifying Contracts.  As
of September 30, 2002 the Company had approximately $17.5 million
available under the Line of Credit. Since inception, the  Company
has  also  funded a portion of its working capital needs  through
cash flows from operating activities.

      The  self-liquidating nature of installment  Contracts  and
other loans enables the Company to assume a higher debt-to-equity
ratio  than  in most businesses. The amount of debt  the  Company
incurs from time to time under these financing mechanisms depends
on  the Company's need for cash and it's ability to borrow  under
the  terms  of  its  Line  of Credit. The Company  believes  that
borrowings  available under the Line of Credit as  well  as  cash
flow   from  operations  and,  if  necessary,  the  issuance   of
additional  subordinated  debt and, or  the  sale  of  additional
securities in the capital markets, will be sufficient to meet its
short term funding needs.

   The Company renewed its credit facility on June 28, 2002.  The
new  loan  agreement expires November 30, 2004 and bears interest
at  the  prime  rate plus .25% and offers several  LIBOR  pricing
options.  The  new  loan  agreement  released  Bank  One   as   a
participating bank and added First Tennessee Bank. The Company is
pleased with its new banking relationship and believes it will be
beneficial for future expansion.



Future Expansion

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


 The Company currently intends to continue its expansion through
the  purchase of additional Contracts and the expansion  of  its
direct consumer loan program.  In order to increase the size  of
the  Company's portfolio of Contracts, it will be necessary  for
the  Company to open additional branch offices and increase  the
size  of  its revolving Line of Credit arrangement, either  with
its current lender or another lender.  The Company, from time to
time,  has  and  will meet with private investors and  financial
institutions that specialize in investing in subordinated  debt.
The  Company also intends to continue its policy of  not  paying
dividends  and  using  earnings  from  operations  to   purchase
Contracts  or  make direct consumer loans. The Company  believes
that  opportunity  for  growth continues to  exist  in  Florida,
Georgia, North Carolina, South Carolina and Ohio and intends  to
continue  its expansion activities in those states. The  Company
is  currently expanding its automobile financing program in  the
State  of  Ohio.  The  Company has targeted  certain  geographic
locations within the State of Ohio where it believes there is  a
sufficient  market  for  its automobile financing  program.  The
Company  is currently purchasing Contracts in the State of  Ohio
utilizing  employees  who reside in the  State  of  Ohio.  These
employees  are developing their respective markets in  Ohio  and
the Company has created a Central Buying Office in its Corporate
Headquarters  in  Clearwater Florida to  purchase,  process  and
service  these Contracts. The Company's strategy is  to  monitor
these  new markets and ultimately decide where and when to  open
actual  branch  locations. No assurances can be given,  however,
that  any further such expansion will occur. The Company is also
analyzing other markets in States the Company does not currently
operate in, however no assurance can be given that any expansion
will occur in these new markets.

<PAGE> 18

Forward-Looking Information

  This  10-QSB  contains various forward-looking  statements  and
information   that   are  based  on  management's   beliefs   and
assumptions,  as  well  as  information  currently  available  to
management.   When used in this document, the words "anticipate",
"estimate",  "expect", and similar expressions  are  intended  to
identify   forward-looking  statements.   Although  the   Company
believes  that the expectations reflected in such forward-looking
statements  are  reasonable, it can give no assurance  that  such
expectations  will  prove  to be correct.   Such  statements  are
subject to certain risks, uncertainties and assumptions.   Should
one  or  more  of  these risks or uncertainties  materialize,  or
should underlying assumptions prove incorrect, actual results may
vary  materially from those anticipated, estimated  or  expected.
Among  the  key  factors that may have a direct  bearing  on  the
Company's operating results are fluctuations in the economy,  the
degree  and nature of competition, demand for consumer  financing
in  the markets served by the Company, the Company's products and
services,   increases  in  the  default  rates   experienced   on
Contracts,  adverse regulatory changes in the Company's  existing
and future markets, the Company's ability to expand its business,
including its ability to complete acquisitions and integrate  the
operations   of  acquired  businesses,  to  recruit  and   retain
qualified  employees, to expand into new markets and to  maintain
profit margins in the face of increased pricing competition.



Part I. Item 3

                    DISCLOSURES AND CONTROLS

(a)    Evaluation  of  disclosure controls and  procedures.   The
Company maintains controls and procedures designed to ensure that
information  required  to be disclosed in the  reports  that  the
Company  files  or submits under the Securities Exchange  Act  of
1934  is recorded, processed, summarized and reported within  the
time  periods specified in the rules and forms of the  Securities
and  Exchange Commission.  Based upon their evaluation  of  those
controls  and procedures performed within 90 days of  the  filing
date  of  this report, the chief executive officer and the  chief
financial  officer  of the Company concluded that  the  Company's
disclosure controls and procedures were adequate.

(b)    Changes  in  internal  controls.   The  Company  made   no
significant changes in its internal controls or in other  factors
that could significantly affect these controls subsequent to  the
date  of  the evaluation of those controls by the chief executive
officer and chief financial officer.

<PAGE> 19

                   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 -  None

<PAGE> 20

                           SIGNATURES

   In  accordance with the requirements of the Securities Act  of
1934, the Registrant certifies that it has reasonable grounds  to
believe that it meets all of the requirements for filing on  Form
10-QSB  and authorized this Report to be signed on its behalf  by
the undersigned, in the City of Clearwater, State of Florida,  on
November 13, 2002.


                    NICHOLAS FINANCIAL, INC.
                          (Registrant)


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


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



<PAGE> 21

                         CERTIFICATION

I, Peter L. Vosotas, certify that:

    1. I have reviewed this quarterly report on Form 10-QSB of Nicholas
       Financial, Inc.;

    2. Based on my knowledge, this quarterly report does not contain any
       untrue statement of a material fact or omit to state a material
       fact necessary to make the statements made, in light of the
       circumstances under which such statements were  made,  not
       misleading with respect to the period covered by this quarterly
       report;

    3. Based on my knowledge, the financial statements, and other
       financial information included in this quarterly report, fairly
       present in all material respects the financial condition, results
       of operations and cash flows of the registrant as of, and for,
       the periods presented in this quarterly report;

    4. The registrant's other certifying officers and I are responsible
       for establishing and maintaining disclosure controls and procedures
       (as defined in Exchange Act Rules 13a-14 and 15d-14) for the
       registrant and have:

          a)designed such disclosure controls and procedures to ensure that
            material information relating to the registrant, including its
            consolidated subsidiaries, is made known to us by others within
            those entities, particularly during the period in which this
            quarterly report is being prepared;

          b)evaluated the effectiveness of the registrant's disclosure
            controls and procedures as of a date within 90 days prior to the
            filing date of this quarterly report (the "Evaluation Date"); and

          c)presented in this quarterly report our conclusions about the
            effectiveness of the disclosure controls and procedures based on
            our evaluation as of the Evaluation Date;

    5. The registrant's other certifying officers and I have disclosed,
       based on our most recent evaluation, to the registrant's auditors
       and the audit committee of registrant's board of directors (or
       persons performing the equivalent functions):

          a)all significant deficiencies in the design or operation of internal
            controls which could adversely affect the registrant's ability to
            record, process, summarize and report financial data and have
            identified for the registrant's auditors any material weaknesses
            in internal controls; and

          b)any fraud, whether or not material, that involves management or
            other employees who have a significant role in the registrant's
            internal controls;

    6. The registrant's other certifying officers and I have indicated in
       this quarterly report whether there were significant changes in
       internal controls or in other factors that could significantly
       affect internal controls subsequent to the date or our most
       recent evaluation, including any corrective actions with regard
       to significant deficiencies and material weaknesses.


Date: November 13, 2002            /s/ Peter L. Vosotas
      -------------------          -------------------------
                                   Peter L. Vosotas
                                   President & CEO


<PAGE> 22

                         CERTIFICATION

I, Ralph T. Finkenbrink, certify that:

    1. I have reviewed this quarterly report on Form 10-QSB of Nicholas
       Financial, Inc.;

    2. Based on my knowledge, this quarterly report does not contain any
       untrue statement of a material fact or omit to state a material
       fact necessary to make the statements made, in light of the
       circumstances under which such statements were  made,  not
       misleading with respect to the period covered by this quarterly
       report;

    3. Based on my knowledge, the financial statements, and other
       financial information included in this quarterly report, fairly
       present in all material respects the financial condition, results
       of operations and cash flows of the registrant as of, and for,
       the periods presented in this quarterly report;

    4. The registrant's other certifying officers and I are responsible for
       establishing and maintaining disclosure controls and procedures
       (as defined in Exchange Act Rules 13a-14 and 15d-14) for the
       registrant and have:

         a) designed such disclosure controls and procedures to ensure that
            material information relating to the registrant, including its
            consolidated subsidiaries, is made known to us by others within
            those entities, particularly during the period in which this
            quarterly report is being prepared;

         b) evaluated the effectiveness of the registrant's disclosure
            controls and procedures as of a date within 90 days prior to the
            filing date of this quarterly report (the "Evaluation Date"); and

         c) presented in this quarterly report our conclusions about the
            effectiveness of the disclosure controls and procedures based on
            our evaluation as of the Evaluation Date;

    5. The registrant's other certifying officers and I have disclosed,
       based on our most recent evaluation, to the registrant's auditors
       and the audit committee of registrant's board of directors (or
       persons performing the equivalent functions):

         a) all significant deficiencies in the design or operation of internal
            controls which could adversely affect the registrant's ability to
            record, process, summarize and report financial data and have
            identified for the registrant's auditors any material weaknesses
            in internal controls; and

         b) any fraud, whether or not material, that involves management
            or other employees who have a significant role in the registrant's
            internal controls;

    6. The registrant's other certifying officers and I have indicated in
       this quarterly report whether there were significant changes in
       internal controls or in other factors that could significantly
       affect internal controls subsequent to the date or our most
       recent evaluation, including any corrective actions with regard
       to significant deficiencies and material weaknesses.


Date: November 13, 2002                /s/Ralph T. Finkenbrink
      -----------------                ----------------------------
                                       Ralph T. Finkenbrink
                                       Senior Vice President

<PAGE> 23

                          EXHIBIT INDEX


Item 6.  Exhibits and Reports on Form 8-K



3.1   Articles of Incorporation and By-Laws of Nicholas
       Financial, Inc. Incorporated by reference to the
       Company's Form 10-SB (File No. 0-26680) filed on
       March 13, 1996

4.1   Stock Certificate

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

10.1.1  Loan and Security Agreement dated March 31, 1993
         between BA Business Credit, Inc. and  Nicholas
         Financial, Inc.

        Incorporated by reference to Exhibit 10.1.1 to the
        Company's Form 10-SB (File No. 0-26680) filed on
        March 13, 1996

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

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

10.1.3  Temporary Line Increase Agreement dated Mach
         28, 1994

        Incorporated by reference to Exhibit 10.1.3 to the
        Company's Form 10-SB (File No. 0-26680) filed on
        March 13, 1996

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

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

10.1.5  Amendment No. 3 to Loan Agreement dated July 5, 1994

        Incorporated by reference to Exhibit 10.1.5 to the
        Company's Form 10-SB (File No. 0-26680)   filed on
        March 13, 1996

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

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

10.1.7  Amendment No. 5 to Loan Agreement  dated July
         13, 1995

        Incorporated by reference to Exhibit 10.1.7 to the
        Company's Form 10-KSB for the fiscal year ended March
        31, 1996

10.1.8  Amendment No. 6 to Loan Agreement  dated May 13, 1996

        Incorporated by reference to Exhibit 10.1.8 to the
        Company's Form 10-QSB for the three months ended
        June 30, 1996

10.1.9  Amendment No. 7 to Loan Agreement dated July 5, 1997

        Incorporated by reference to Exhibit 10.1.9 to the
        Company's Form 10-QSB for the three months ended
        September 30, 1997


<PAGE> 24

10.1.10 Amendment No. 8 to Loan Agreement dated September
         18, 1998

        Incorporated by reference to Exhibit 10.2.0 to the
        Company's Form 10-QSB for the  three months ended
        September 30, 1998

10.1.11 Amendment No. 9 to Loan Agreement dated November
         25, 1998

        Incorporated by reference to Exhibit 10.2.1 to the
        Company's Form 10-QSB for the three months ended
        December 31, 1998

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

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

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

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

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

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

10.3.1  Employee Stock Option Plan

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

10.3.2  Non-Employee Stock Option Plan

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

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

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

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

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

21      Subsidiaries of Nicholas Financial, Inc.

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

24      Powers of Attorney (included on signature page hereto)

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

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

<PAGE> 25

Exhibit 99.1


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

   Solely for the purposes of complying with 18 U.S.C.  1350, I ,
the  undersigned  Chief Executive Officer of Nicholas  Financial,
Inc. (the "Company"), hereby certify, based on my knowledge, that
the  Quarterly  Report  on Form 10-QSB of  the  Company  for  the
quarter  ended  September 30, 2002 (the "Report") fully  complies
with the requirements of Section 13(a) of the Securities Exchange
Act  of  1934 and that information contained in the Report fairly
presents,  in all material respects, the financial condition  and
results of operations of the Company.


/S/Peter L. Vosotas
--------------------------
Peter L. Vosotas
Chief Executive Officer
November 13, 2002

<PAGE> 26

Exhibit 99.2


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

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



/S/Ralph T. Finkenbrink
---------------------------------
Ralph T. Finkenbrink
Chief Executive Officer
November 13, 2002