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, 1996 


    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 November 13th, 1996 there were 5,885,739 shares of common
                        stock outstanding
                                
 This Form 10-QSB consists of 17 pages. Exhibits are indexed at
                            page 16.


<PAGE>

                    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, 1996          3

Condensed Consolidated Statements of Income for the three and
     six months ended September 30, 1996 and 1995                      4

Condensed Consolidated Statements of Cash Flows for the
     six months ended September 30, 1996 and 1995                      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>

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

<TABLE>
<CAPTION>
                                                   September 30,
                                                       1996
<S>
Assets                                             <C>             
Cash                                               $     128,447
Accounts receivable                                       22,573
Prepaid expenses and other assets                        429,974
Finance receivables, net                              20,457,484
Property and equipment, net                              189,259
Intangible assets                                            843
Deferred loan costs                                       12,175
Deferred income taxes                                    502,828

Total assets                                         $21,743,583
           
Liabilities                                                     
Line of credit                                       $14,655,594
Notes payable - related party                          2,256,095
Deferred revenues                                        210,600
Accounts payable                                         493,042
Other liabilities                                        346,319
Income taxes payable                                      37,918

                                                      17,999,568
           
Shareholders' equity                                            
Preferred stock, no par: 5,000,000 shares                      -
authorized;
none issued and outstanding
Common stock, no par: 20,000,000 shares                1,771,026
authorized; 5,885,739  shares issued and
outstanding
Retained earnings                                      1,972,989

                                                       3,744,015

Total liabilities and shareholders' equity           $21,743,583

</TABLE>

See accompanying notes.
 
<PAGE>

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

<TABLE>
<CAPTION>
                                                           Three months endedSix months ended
                                                              September 30          September 30
                                                           1996        1995        1996        1995
<S>                                                     <C>         <C>         <C>         <C>
Revenue:
Interest income on finance receivables                  $1,499,907  $1,328,624  $2,847,960  $2,435,630
Sales                                                      122,969     138,850     236,680     290,108
Interest income on term deposits and lease receivables         621         557         633       2,680

                                                         1,623,497   1,468,031   3,085,273   2,728,418
Expenses:
Cost of sales                                               25,091      30,760      47,556      65,229
Marketing                                                   61,827      47,234     121,415      93,480
Administrative                                             575,716     532,341   1,123,463   1,023,308
Provision for credit losses                                131,808      78,978     186,121     119,764
Deferred compensation expense                                    -    (194,311)     29,947     128,828
Depreciation and amortization                               21,422      23,186      42,187      52,341
Interest expense                                           423,972     377,252     818,602     708,882

                                                         1,239,836     895,440   2,369,291   2,191,832

Operating income before income taxes                       383,661     572,591     715,981     536,586

Income tax expense (benefit):
Current                                                    150,052      82,023     289,835     340,583
Deferred                                                    (3,110)    141,099     (17,029)   (131,498)

                                                           146,942     223,122     272,806     209,085

Net Income                                                $236,719    $349,469    $443,175    $327,501


Primary Earnings per Share                                   $0.04       $0.06       $0.07       $0.06

Fully Diluted Earnings per Share                             $0.04       $0.06       $0.07       $0.05
                                                         
Weighted average number of common and common
     equivalent shares - Primary                         6,322,458   6,124,537   6,325,194   6,124,318
Weighted average number of common and common             
     equivalent shares - Fully Diluted                   6,322,458   6,271,230   6,325,194   6,271,011
                                                         
</TABLE>
See accompanying notes.

<PAGE>

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

<TABLE>
<CAPTION>
                                                               Six months ended September 30
                                                                      1996              1995
<S>                                                              <C>               <C>
Operating activities
Net income                                                       $443,175          $327,501
Adjustments to reconcile net income to net cash provided
  by operating activities:
Depreciation of property and equipment                             40,500            43,500
Provision for credit losses                                       186,121           119,764
Amortization of intangible assets and deferred loan costs           9,138             8,841
Deferred compensation expense                                      29,947           128,828
Deferred income taxes                                             (17,029)         (131,498)

Changes in operating assets and liabilities:
Accounts receivable                                                 2,581             8,195
Prepaid expenses and other assets                                (159,274)         (274,867)
Deferred revenues                                                  21,706            50,742
Accounts payable                                                  (41,496)          (81,680)
Other liabilities                                                     795            (4,401)
Income taxes payable                                              (84,164)           15,583

Net cash provided by operating activities                         432,000           210,508

Investing activities
Increase in finance receivables, net of principal collected    (2,316,821)       (4,745,911)
Purchase of property and equipment                                (49,342)          (34,650)
Increase in deferred loan costs                                         -           (14,261)

Net cash used by investing activities                          (2,366,163)       (4,794,822)

Financing activities
Net proceeds from notes payable-related party and
  line of credit borrowings                                     1,554,791         4,316,339
Proceeds from sale of the Company's common stock                   17,028            50,650

Net cash provided by financing activities                       1,571,819         4,366,989

Net decrease in cash                                             (362,344)         (217,325)

Cash, beginning of period                                         490,791           283,342
Cash, end of period                                              $128,447           $66,017

</TABLE>
See accompanying notes.

<PAGE>

                     Nicholas Financial, Inc.
                                
     Notes to the Condensed Consolidated Financial Statements
                                
                           (Unaudited)
                                
                       September 30, 1996
                                

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, 1996 are not necessarily
indicative of the results that may be expected for the year ended
March 31, 1997. 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, 1996.

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     $30,617,153
    Less:
       Unearned interest                     (6,815,947)

                                             23,801,206

       Nonrefundable dealer reserves         (2,773,722)
       Allowance for credit losses             (570,000)

       Finance receivables, net             $20,457,484
</TABLE>

The terms of the receivables range from 6 to 60 months and bear a
weighted average effective interest rate of 25%.

<PAGE>

4. Line of Credit

The Company has a $25,000,000 line of credit facility (the Line)
with BA Business Credit, Inc. which expires on June 3, 1998.
Borrowings under the Line bear interest at the Bank of America
prime rate plus 1.25% and 1.00%, when the outstanding balance
exceeds $10,000,000 and $15,000,000, respectively (9.5% at
September 30, 1996).  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.


5. 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 prices from $1.75 to
$2.00 per share.                                  $1,800,000
                                                       
Note payable, unsecured, interest at 12%,              
quarterly interest due through April 2000,             
at which time entire balance and unpaid         
interest is due, subordinated to the Line.
The note is convertible at $2.75 per share.          200,000
                                                       
Notes payable, unsecured interest at 12%,              
principal and interest due through May 1998.         233,341
                                                       
Note payable, unsecured, interest at 12%,              
quarterly interest due through August 1997,
at which time the entire principal balance
is due.                                               22,754
                                              
                                                   $2,256,095

</TABLE>

6. Impact of New Accounting Pronouncement

Statement of Financial Accounting Standards No 123, "Accounting
for Stock-Based Compensation " ("SFAS 123"), effective for the
company in fiscal 1997, provides an alternative method for
accounting for stock-based compensation and requires certain
disclosures regarding the fair value of stock-based compensation.
The Company does not expect to adopt the alternative method of
accounting for stock-based compensation and, accordingly, the
adoption of SFAS 123 will not have any effect on the Company's
financial position or results of operations. The Company expects
to expand its disclosure of stock-based compensation plans to
include pro forma fair value information for grants in it's
fiscal 1997 Annual Report.

<PAGE>

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

   The  Company  is  a  Florida-based consumer  finance  company,
focused  primarily on the purchase of Contracts  from  automobile
dealers and the origination of small direct consumer loans.   The
Contracts  are for the purchase of used cars and light trucks  by
borrowers  who  do not meet the credit standards  of  traditional
lenders.   The  Company's small direct consumer  loans  are  made
primarily to borrowers under the Contracts.  As of September  30,
1996,  Contracts  accounted  for  approximately  97.61%  of   the
Company's  aggregate  loan portfolio and  small  direct  consumer
loans accounted for approximately 2.39%. As of September 30, 1996
the Company operated ten branch locations in the state of Florida
and  on  October  14, 1996 the Company opened  its  first  branch
location in the State of Georgia.

<TABLE>
<CAPTION>
                                         Three Months Ended September 30,   Six Months Ended September 30,
                                              1996               1995            1996             1995
<S>                                       <C>                <C>             <C>              <C>    
Average Net Finance Receivables (1)       $23,564,289        $20,064,300     $22,948,376      $19,034,402
Average Indebtedness (2)                   16,621,774         14,213,469      16,050,685       13,253,649
Total Revenues                              1,499,907          1,328,624       2,847,960        2,435,630
Interest Expense                              423,972            377,252         818,602          708,882
Net Interest Income                         1,075,935            951,372       2,029,358        1,726,748
Gross Portfolio Yield (3)                      25.46%             26.49%          24.82%           25.59%
Average Cost of Borrowed Funds (2)             10.20%             10.62%          10.20%           10.70%
Net Interest Spread (4)                        15.26%             15.87%          14.62%           14.89%
Net Portfolio Yield (3)                        18.26%             18.97%          17.69%           18.14%
Net Charge-Off Percentage (5)                  12.19%             10.31%          11.52%            8.01%

</TABLE>
_________________
(1) Average  net  finance receivables represents the  average  of
    net  finance  receivables throughout the year.   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) Net  charge-off percentage represents net charge-offs divided
    by  average  net finance receivables outstanding  during  the
    period.

<PAGE>

Three  months  ended September 30, 1996 compared to three  months
ended September 30, 1995

      Revenue increased 10.59% to $1,623,497 for the period ended
September  30,  1996,  from  $1,468,031  for  the  period   ended
September  30, 1995. This increase is attributed to the  increase
in  net  finance receivables. The gross portfolio yield decreased
to 25.46% for the period ended September 30, 1996 from 26.49% for
the period ended September 30, 1995.

       Operating expenses, excluding provision for credit losses,
stock  compensation  expense and interest expense,  increased  to
$684,056 for the three month period ended September 30, 1996 from
$633,521  for  the three month period ended September  30,  1995.
This  increase  is  attributed to the opening of  one  additional
branch  and  the  increase  in  transaction  volume  at  existing
branches.

      Interest expense increased to $423,972 for the period ended
September  30, 1996 as compared to $377,252 for the period  ended
September  30, 1995. This increase is attributed to the  increase
in  average outstanding borrowings during the comparable periods.
The  average cost of funds borrowed by the Company was 10.20% for
the period ended September 30, 1996 as compared to 10.62% for the
period ended September 30, 1995.

   Provision  for  credit losses increased to  $131,808  for  the
period  ended September 30, 1996 as compared to $78,978  for  the
period  ended  September 30, 1995. The increase is attributed  to
the increased net charge-off percentage from 10.31% for the three
months  ended  September 30, 1995 to 12.19% for the three  months
ended September 30, 1996.

       Net  income for the three months ended September 30,  1996
decreased  to  $236,719 compared to $349,469 for  the  comparable
period  ended September 30, 1995. The decrease in net  income  is
due  to  compensation expense recognized in previous periods  and
reversed  due  to the cancellation of a warrant  in  the  quarter
ended  September 30, 1995. Net income, excluding  the  effect  of
compensation  expense,  would have been $230,875  for  the  three
month period ended September 30, 1995 as compared to $236,719 for
the three month period ended September 30, 1996.

Six  months ended September 30, 1996 compared to six months ended
September 30, 1995

   Revenue  increased 13.08% to $3,085,273 for the  period  ended
September  30,  1996,  from  $2,728,418  for  the  period   ended
September  30, 1995. This increase is attributed to the  increase
in  net  finance receivables. The gross portfolio yield decreased
to 24.82% for the period ended September 30, 1996 from 25.59% for
the period ended September 30, 1995.

       Operating expenses, excluding provision for credit losses,
stock  compensation  expense and interest expense,  increased  to
$1,334,621  for the three month period ended September  30,  1996
from  $1,234,358 for the three month period ended  September  30,
1995.  This  increase  is  attributed  to  the  opening  of   one
additional  branch  and  the increase in  transaction  volume  at
existing branches.

      Interest expense increased to $818,602 for the period ended
September  30, 1996 as compared to $708,882 for the period  ended
September  30, 1995. This increase is attributed to the  increase
in  average outstanding borrowings during the comparable periods.
The  average cost of funds borrowed by the Company was 10.20% for
the period ended September 30, 1996 as compared to 10.70% for the
period ended September 30, 1995.

   Provision  for  credit losses increased to  $186,121  for  the
period  ended September 30, 1996 as compared to $119,764 for  the
period ended September 30, 1995. This increase  is attributed  to
the  increased net charge-off percentage from 8.01% for the three
months  ended  September 30, 1995 to 11.52% for the three  months
ended September 30, 1995.

       Net  income  for the six months ended September  30,  1996
increased  to  $443,175 compared to $327,501 for  the  comparable
period  ended  September  30, 1995. The six  month  period  ended
September  30, 1995 included non-cash stock compensation  expense
of $128,828 ($78,629 after income taxes) related to certain stock
options  and  warrants previously granted to key  executives  and
employees.   The comparable six month period ended September  30,
1996  included  $29,947  of stock compensation  expense  ($18,603
after   income  taxes).   Net  income  excluding  non-cash  stock
compensation  expense  would  have  been  $461,780  compared   to
$406,130  an  increase  of 14% for the six  month  periods  ended
September 30, 1996 and 1995, respectively.

<PAGE>

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 75 Contracts with
an  aggregate initial principal amount of approximately $521,700.
As  of September 30, 1996, the Company had 102 active pools.  The
effective  APR for these pools ranges from 20% to  30%,  and  the
discount  averages between 10% and 12%.  Loan pools are  analyzed
monthly and the effective return for each pool is recomputed,  if
necessary, based upon changes during the month.

   The  Company  pools  Contracts according  to  branch  location
because  the  branches  purchase Contracts in  different  markets
located  in the State of Florida.  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
non-refundable dealer reserve.  In situations where the  discount
is  determined to be insufficient to absorb all of the  potential
losses associated with the pool, unearned income will be added to
reserves until total reserves have reached the appropriate level.
If  the  non-refundable reserve and the unearned revenue  reserve
are  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 excess reserves,  the  excess
reserves are credited to 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,  1996,  the
Company  had  established reserves for  losses  on  Contracts  of
$3,320,666 , or 14.32% of net outstanding receivables. Of the 20%
of   Contracts  that  are  never  fully  paid  the  Company   has
experienced  a  historical charge-off rate of  9.97%,  9.74%  and
3.50%  of  average net receivables respectively,  for  the  years
ended  March  31,  1996, 1995, and 1994.  The experience  of  the
Company  is that the longer the period of time during  which  the
borrower   has  made  payments  under  his  Contract,  the   less
likelihood there is of a default.

  The Company utilizes a pooling arrangement similar to that used
in  connection with Contracts in establishing reserves for direct
loans  initiated.   As  of September 30, 1996,  the  Company  had
experienced  immaterial  losses under its  direct  consumer  loan
program;  however, the program was implemented in April 1995  and
these results cannot be considered representative of results that
will be experienced in the future.  As of September 30, 1996, the
Company  had  established reserves for losses on direct  consumer
loans  of  $23,055 or 3.75% of outstanding receivables under  the
loans.

<PAGE>

  The Company defines any account that is more than ten days past
due  as  "delinquent."   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                  Year Ended
                                     September  30, 1996              March  31,1996
<S>                                      <C>                            <C>
Contracts
Gross Amount Outstanding                 $29,884,667                    $27,250,451

</TABLE>
<TABLE>
<CAPTION>
                                     Dollar                         Dollar
Delinquencies                        Amount       Percent*          Amount     Percent*
<S>                               <C>             <C>             <C>          <C>
30 to 59 days                     $1,533,922       5.13%          $1,346,150    4.94%
60 to 89 days                        252,658       0.85%             326,542    1.20%
90   +   days                        104,019       0.35%              44,746    0.16%

Total Delinquencies               $1,890,599                      $1,717,438

*Total Delinquencies as
 percent of outstanding balance                    6.33%                        6.30%

</TABLE>
<TABLE>
<S>                                      <C>                             <C>
Direct Loans
Gross Amount Outstanding                 $732,486                        $559,123
</TABLE>
<TABLE>
<S>                                   <C>       <C>                     <C>     <C>   
Delinquencies

30 to 59 days                         $17,711   2.42%$                    321    0.00%
60 to 89 days                               0    0.00%                  3,197    0.57%
90 + days                                   0    0.00%                      0    0.00%

Total Delinquencies                   $17,711                          $3,518

*Total Delinquencies as a
percent of outstanding balance                   2.42%                           0.57%

</TABLE>

Income Taxes

   The  provision  for  income taxes for the three  months  ended
September  30, 1996 decreased to $146,942 from $223,122  for  the
three  month  period  ended September  30,  1995.  The  Company's
effective  tax  rate decreased from 38.97% for  the  three  month
period  ended  September 30, 1995 to 38.30% for the  three  month
period ended September 30, 1996.

<PAGE>

Liquidity and Capital Resources

The  Company's cash flows for the six months ended September  30,
1996 and September 30, 1995 are summarized as follows:
<TABLE>
<CAPTION>
                                        Six  months endedSix months ended
                                          September 30,  September 30,
                                              1996          1995
<S>                                      <C>              <C>
Cash provided by (used in):
     Operating Activities -              $  432,000       $  210,508
     Investing Activities -
      (primarily purchase of Contracts)  (2,366,163)      (4,794,822)

     Financing Activities                 1,571,819        4,366,989

        Net (decrease) in cash             (362,344)        (217,325)

</TABLE>

   The  Company's primary use of working capital during  the  six
months  ended September 30, 1996 was the funding of the  purchase
of  Contracts.   The  Contracts were financed  partially  through
borrowings on the BankAmerica Line of Credit.  The Line of Credit
is  secured primarily by Contracts and provides the Company  with
financing  to  increase  the number of  Contracts  for  its  loan
portfolio.   Under the Line of Credit, the Company is subject  to
customary  covenants such as the maintenance of certain financial
ratios   and   minimum  net  worth  requirements,   and   certain
restrictions on the payment of cash dividends on the Common Stock
and  a  requirement to maintain minimum subordinated indebtedness
of $400,000.

   Since  inception, the Company has funded operations  from  the
following sources: borrowings under the Line of Credit,  proceeds
from  the  issuance  of subordinated debt,  funds  provided  from
payments  received under Contracts, and cash flows from operating
activities.

   The  decrease  in net cash flows used in investing  activities
during  the  six months ended September 30, 1996   was  primarily
attributable  to a decrease in the amount of contracts  purchased
as compared to the period ended September 30, 1995.

   In  May  1996, through a series of negotiations,  the  Company
increased  its  Line of Credit to $25 million from  $20  million.
The Company was also able to increase the percentage of Contracts
that  qualify  for funding and reduce the amount of  subordinated
debt required by BankAmerica.

   The  Company's Registration Statement on Form SB-2  under  the
Securities Act of 1933 was declared effective on October 1, 1996.
On   October   4,   1996   the  Company  and   its   underwriters
Interstate/Johnson Lane agreed to an initial closing  of  951,647
shares  at  $2.125 per share. The gross proceeds were  $2,022,250
and  the  net proceeds were $1,762,785. On October 31,  1996  the
Company agreed to a second and final closing of 150,558 shares at
$2.125  per share. The gross proceeds were $319,936 and  the  net
proceeds were approximately $273,000. The Company intends to  use
the proceeds from the offering to repay certain subordinated debt
and  outstanding indebtedness under its line of credit,  and  the
balance  to  general corporate purposes, including future  branch
expansion.  The Company will make additional capital expenditures
as  it  opens new branches and increases the number of employees.
The  Company  believes  the  cash flow from  operations,  current
borrowing  capacity under the Line of Credit and other  available
financing alternatives will be adequate to meet anticipated needs
for  working  capital and capital expenditures, but no  assurance
can  be  given that the Line of Credit will be increased or  that
alternative  sources  of  capital  will  be  available  on  terms
acceptable to permit the Company to finance future expansion.

<PAGE>

Future Expansion

   The  Company  intends  to continue its expansion  through  the
purchase of additional Contracts and the expansion of its  direct
consumer loan program.  In order to increase the size of its loan
portfolio  of Contracts, 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,  Jacksonville and Boca Raton as areas in  Florida  and
Macon,  Valdosta, and Atlanta as areas in Georgia  where  it  may
open additional branch offices during fiscal 1997.

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>

                   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  - No reports on From 8-K were filed
               during the fiscal quarter ending September 30, 1996

<PAGE>
                                
                           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, 1996.
                                
                                
                    NICHOLAS FINANCIAL, INC.
                          (Registrant)


  Date: November 13, 1996       /s/ Peter L. Vosotas
                                    Peter L. Vosotas
                                    Chairman, President, 
                                    Chief Executive Officer
                                    (Principal Executive Officer)


  Date: November 13, 1996       /s/ Ralph T. Finkenbrink
                                    Ralph T. Finkenbrink
                                    (Principal  Financial Officer
                                    and Accounting Officer)


<PAGE>

                          EXHIBIT INDEX

    Exhibit Document

    1.1      Schedule for Computation of Earnings Per Share


<PAGE>



                    Nicholas Financial, Inc.
                           Exhibit 1.1
                                
         Schedule for Computation of Earnings Per Share
                                
                           (Unaudited)
                              
<TABLE>
<CAPTION>                                
                                                      Three Months              Six Months
                                                    Ended September 30,      Ended September 30,
                                                    1996          1995      1996         1995
    <S>                                            <C>          <C>         <C>         <C>                   
    Net income                                        236,719      349,469     443,175     327,501
                                                                    
    Weighted average number of                   
    common shares outstanding during the period     5,872,648    5,795,005   5,865,384   5,794,786

    Add: Primary common equivalent shares 
    determined using the "treasury stock" method      
    representing shares issuable upon exercise of 
    stock options and warrants                        459,810      329,532     459,810     329,532
                                                                    
    Weighted average number of                                      
    shares used in Primary EPS calculation          6,332,458    6,124,537   6,325,194   6,124,318
                                                                        
    Add: Fully Diluted common equivalent shares 
    determined using the "treasury stock" method 
    representing shares issuable upon exercise of 
    stock options and warrants                        459,810      476,225     459,810     476,225
    
    Weighted average number of shares used in       
    Fully Diluted EPS calculation                   6,332,458    6,271,230   6,325,194   6,271,011 
                                                                    
    Primary Earnings Per Share                          $0.04        $0.06       $0.07       $0.06
                                                                    
    Fully Diluted Earnings Per Share                    $0.04        $0.06       $0.07       $0.05

</TABLE>


<PAGE>


[ARTICLE] 5

[LEGEND]

This Schedule Contains Summary Information Extracted From The Condensed 
Consolidated Balance Sheet At September 30, 1996 And The Condensed Consolidated
Statements Of Income For The Three Months Ended September 30,1996 And 
September 30, 1995 And Is Qualified In Its Entirety By Reference To Such 
Financial Statements.


<TABLE>
<S>                          <C>                  <C>         
[PERIOD-TYPE]                  3-MOS                3-MOS       
[FISCAL-YEAR-END]              MAR-31-1997          MAR-31-1996  
[PERIOD-END]                   SEP-30-1996          SEP-30-1995  
[CASH]                             128,447                    0       
[SECURITIES]                             0                    0         
[RECEIVABLES]                   20,480,057                    0         
[ALLOWANCES]                     3,343,722                    0       
[INVENTORY]                              0                    0           
[CURRENT-ASSETS]                         0                    0          
[PP&E]                             488,109                    0      
[DEPRECIATION]                     298,850                    0     
[TOTAL-ASSETS]                  21,743,583                    0        
[CURRENT-LIABILITIES]           17,999,568                    0           
[BONDS]                                  0                    0         
[PREFERRED-MANDATORY]                    0                    0        
[PREFERRED]                              0                    0        
[COMMON]                         1,771,026                    0      
[OTHER-SE]                       1,972,989                    0       
[TOTAL-LIABILITY-AND-EQUITY]    21,743,583                    0         
[SALES]                            122,969              138,850     
[TOTAL-REVENUES]                 1,623,497            1,468,031   
[CGS]                               25,091               30,760      
[TOTAL-COSTS]                      580,871              486,990    
[OTHER-EXPENSES]                   658,965              408,450   
[LOSS-PROVISION]                   131,808               78,978     
[INTEREST-EXPENSE]                 423,972              377,252     
[INCOME-PRETAX]                    383,661              572,591     
[INCOME-TAX]                       146,942              223,122     
[INCOME-CONTINUING]                236,719              349,469     
[DISCONTINUED]                           0                    0           
[EXTRAORDINARY]                          0                    0       
[CHANGES]                                0                    0    
[NET-INCOME]                       236,719              349,469    
[EPS-PRIMARY]                          .04                  .06      
[EPS-DILUTED]                          .04                  .06         

<F1> [RECEIVABLES] ARE PRESENTED NET OF UNEARNED FINANCE CHARGES, 
    NON-REFUNDABLE DEALER RESERVE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS.
<F2> [ALLOWANCES] ARE PRESENTED AS TOTAL RESERVES, COMPRISED OF 
    NON-REFUNDABLE DEALER RESERVE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS.
</TABLE>