<PAGE> 1

         UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                       Washington, DC  20549

                            FORM 10-QSB

X    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES ACT OF 1934 FOR THE PERIOD ENDED JUNE 30, 2001



    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 July 31st, 2001 there were 2,370,819 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 June 30, 2001...................................3

        Condensed Consolidated Statements of Income
         for the three months ended June 30, 2001 and 2000.....4

        Condensed Consolidated Statements of Cash Flows
         for the three months ended June 30, 2001 and 2000.....5

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

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

Part II. Other Information

Item 1. Legal Proceedings.....................................16

Item 2. Changes in Securities.................................16

Item 3. Defaults upon Senior Securities.......................16

Item 4. Submission of Matters to a Vote of Security Holders...16

Item 5. Other Information.....................................16

Item 6. Exhibits and Reports on Form 8-K......................16

        Signatures............................................17

        Exhibit Index.........................................18


<PAGE> 3

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

                                                   June 30
                                                     2001
                                                 ------------
<S>                                              <C>
Assets
Cash                                             $   217,005
Finance receivables, net                          67,114,006
Accounts receivable                                   15,387
Prepaid expenses and other assets                    606,894
Property and equipment, net                          326,099
Deferred income taxes                              1,076,503
                                                 ------------
Total assets                                     $69,355,894
                                                 ============

Liabilities
Line of credit                                   $48,973,426
Notes payable - related party                        768,008
Accounts payable                                   2,804,758
Derivatives                                          989,165
Income taxes payable                                 577,138
Deferred revenues                                    673,999
                                                 ------------
Total liabilities                                 54,786,494

Shareholders' equity
Preferred stock, no par: 5,000,000 shares
authorized;none issued and outstanding                     -

Common stock, no par: 50,000,000 shares
authorized; 2,369,819 shares issued and
outstanding                                        3,832,852
Other comprehensive income (loss)                   (971,024)
Retained earnings                                 11,707,572
                                                 ------------
                                                  14,569,400
                                                 ------------
Total liabilities and shareholders' equity       $69,355,894
                                                 ============
See accompanying notes.

</TABLE>
<PAGE> 4

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

                                           Three months ended
                                                 June 30
                                           2001          2000
                                         -----------------------
<S>                                     <C>          <C>
Revenue:
Interest income on finance receivables   $4,531,751   $3,909,514
Sales                                        99,120      116,810
                                         -----------------------
                                          4,630,871    4,026,324
Expenses:
Cost of sales                                23,689       25,857
Marketing                                   110,457       98,279
Administrative                            1,684,526    1,524,134
Provision for credit losses                 352,649      371,710
Depreciation and amortization                45,000       27,000
Interest expense                            995,832      835,023
                                         -----------------------
                                          3,212,153    2,882,003
                                         -----------------------
Operating income before income taxes      1,418,718    1,144,321

Income tax expense (benefit):
Current                                     543,320      516,007
Deferred                                     (5,615)     (75,000)
                                         -----------------------
                                            537,705      441,007
                                         -----------------------
Net income                                 $881,013     $703,314
                                         =======================

Earnings per share - basic                    $0.38        $0.30
                                         =======================
Earnings per share - diluted                  $0.35        $0.28
                                         =======================

See accompanying notes.

</TABLE>

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


                                      Three months ended June 30
                                          2001         2000
                                      --------------------------
<S>                                   <C>          <C>
Operating activities
Net income                             $  881,013  $  703,314
Adjustments to reconcile net income
 to net cash provided by
 operating activities:
Depreciation of property and equipment     45,000      27,000
Provision for credit losses               352,649     371,710
Deferred income taxes                      (5,615)    (75,000)
Changes in operating assets
 and liabilities:
Accounts receivable                          (919)     (6,681)
Prepaid expenses and other assets         (57,708)   (110,254)
Deferred revenues                          62,270      51,999
Accounts payable                         (194,604)   (359,648)
Income taxes payable                      483,319     510,006
                                      --------------------------
Net cash provided by
 operating activities                   1,565,405   1,112,446

Investing activities
Increase in finance receivables,
 net of principal collected            (2,425,787) (5,782,212)
Purchase of property and equipment        (37,340)    (35,618)
                                      --------------------------
Net cash used in investing activities  (2,463,127) (5,817,830)

Financing activities
Repayment of notes payable
 - related party                         (200,000)   (200,000)
Net proceeds from line of credit          850,000   4,800,000
Issuance (repurchase) of common stock     231,560     (48,905)
                                      --------------------------
Net cash provided by
 financing activities                     881,560   4,551,095
                                      --------------------------
Net decrease in cash                      (16,162)   (154,289)

Cash, beginning of period                 233,167     259,183
                                      --------------------------
Cash, end of period                      $217,005    $104,894
                                      ==========================
See accompanying notes.

</TABLE>

<PAGE> 6

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

                          June 30, 2001


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, 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 months ended
June  30, 2001 are not necessarily indicative of the results that
may  be  expected for the year ending March 31, 2002. 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, 2001.

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)

                           June 30, 2001

<TABLE>
<CAPTION>

                                         Three months ended
                                               June 30,
                                            2001       2000
                                        ----------------------
<S>                                     <C>         <C>
Numerator:

 Numerator for basic earnings per
  share - Net income available to
  common stockholders                    $881,013    $703,314

 Effect of dilutive securities:
  Convertible debt                         13,098      15,554
                                        ----------------------
 Numerator for dilutive earnings
  per share -income available to
  common stockholders after
  assumed conversions                    $894,111    $718,868
                                        ======================

Denominator:
 Denominator for basic earnings per
  share -weighted average shares        2,319,107   2,351,709

 Effect of dilutive securities: (A)
  Employee stock options                  107,574      70,433
  Convertible debt                        155,556     180,556
                                        ----------------------
 Denominator for diluted earnings
  per share -adjusted weighted-
  average shares and assumed
  conversions                           2,582,237   2,602,698
                                        ======================

Earnings per share - basic                  $0.38       $0.30
                                        ======================
Earnings per share - diluted                $0.35       $0.28
                                        ======================
Footnote A:
  The    following   options    and
warrants were outstanding  but  not
included  in  the  computation   of
diluted  earnings per share because
the exercise price was greater than
the  average  market price  of  the
common  shares and, therefore,  the
effect would be antidilutive.

    Options                                     -      35,500
    Warrants                                    -     333,333

</TABLE>

<PAGE> 8

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

                           June 30, 2001

3. Finance Receivables

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

<TABLE>
   <S>                                     <C>
    Finance receivables, gross contract     $106,689,451
     Less:
      Unearned interest                      (25,179,387)
                                            ------------
                                              81,510,064
      Nonrefundable dealer reserves          (10,789,149)
      Allowance for credit losses             (3,606,909)
                                            ------------
      Finance receivables, net               $67,114,006
                                            ============

</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, 2002. Borrowings under  the  Line
bear  interest  at the prime rate. 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  1.75%.  Pledged as collateral for this credit facility  are
all   of   the  assets  of  Nicholas  Financial,  Inc.  and   its
subsidiaries.

<TABLE>
<CAPTION>

5. Notes Payable - Related Party

Notes payable consisted of the following:

<S>                                                    <C>
Notes payable, due through January 2002, unsecured,
subordinated to the Line, with interest at 12% with
quarterly  and  semiannual  interest payments.  The
note  is  convertible  at the option of the holder,
into common shares at $4.50 per share.                  $500,000

Note payable, unsecured, interest at 12%, principal
and interest due through August 2001, at which time
the entire principal balance is due.                     268,008
                                                        ---------
                                                        $768,008

</TABLE>

<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 require 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.

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

On  May  11, 1999 the Company entered into an interest rate  swap
with  a  notional amount of $10 million at a fixed rate of 5.81%,
maturing  on  May  24, 2002. On May 21, 1999 the Company  entered
into  two interest rate swaps with notional amounts of $5 million
each, at fixed rates of 5.81% and 6.08%, maturing on May 24, 2001
and May 24, 2004, respectively.

On  August  18,  1999 the Company terminated a  $5  million  swap
maturing on May 24, 2004 in exchange for $52,000. In addition the
Company entered into an interest rate swap with a notional amount
of $10 million at a fixed rate of 5.80%.

On  May  17, 2000 the Company entered into an interest rate  swap
with a notional amount of $10 million at a fixed rate of 6.87%.

On  March 30, 2001 the Company entered into an interest rate swap
with  a  notional amount of $10 million at a fixed rate of 4.89%,
maturing on March 30, 2003.

The  Company  utilizes  the above noted 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.

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

<PAGE> 10

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



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.

In connection with the adoption of SFAS 133, the Company recorded
the  fair  value  of  its  derivatives as  a  liability  totaling
approximately  ($975k) on April 1, 2001. The fair value  of  such
derivative  was approximately ($989k) as of June  30,  2001.  The
fair value of the options, approximately $18k, was accounted  for
in the consolidated statement of income as a reduction to current
period earnings.


7. Subsequent Events

On  August  7, 2001 the Board of Directors of Nicholas Financial,
Inc.   declared  a  two-for-one  stock  split  on  the  Company's
outstanding shares of common stock, payable in the form of a 100%
stock dividend on September 10, 2001 to shareholders of record as
of the close of business on August 28, 2001.

On  August 8, 2001 the last subordinated debt holder of  Nicholas
Financial, Inc converted their $500,000 note into common stock at
a price of $4.50 per share.



<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 June 30, 2001 to $881,013 from $703,314 for the three month
period  ended June 30, 2000. Earnings were favorably impacted  by
an  increase in the outstanding loan portfolio. The Company's NDS
subsidiary  did  not  contribute  significantly  to  consolidated
operations  in  the three month periods ended June  30,  2001  or
2000.

<TABLE>
<CAPTION>
                                    Three Months Ended June 30
                                       2001            2000
                                   ----------------------------
<S>                                <C>            <C>
Average Net Finance Receivables(1)  $80,590,601    $67,343,312

Average Indebtedness(2)              49,941,434     42,149,224

Total Interest Revenues               4,531,751      3,909,514

Interest Expense                        995,832        835,023
                                   ----------------------------
Net Interest Income                   3,535,919      3,074,491

Gross Portfolio Yield(3)                 22.49%         23.22%

Average Cost of Borrowed Funds(2)         7.98%          7.92%
                                   ----------------------------
Net Interest Spread (4)                  14.51%         15.30%

Net Portfolio Yield (3)                  17.55%         18.26%

Write-off to Liquidation(5)               7.34%          5.68%

Net Charge-Off Percentage(6)              6.33%          4.81%


<FN>

(1) Average  net  finance receivables represents the  average  of
    net   finance  receivables  throughout  the  period.      Net
    finance  receivables  represents  gross  finance  receivables
    less   any   unearned  finance  charges  related   to   those
    receivables.

(2) Average   indebtedness  represents  the  average  outstanding
    borrowings  under  the  Line  of Credit  and  notes  payable-
    related  party.   Average cost of borrowed  funds  represents
    interest expense as a percentage of average indebtedness.

(3) Gross  portfolio  yield  represents  total  revenues   as   a
    percentage   of   average  net  finance   receivables.    Net
    portfolio   yield  represents  net  interest  income   as   a
    percentage of average net finance receivables.

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

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

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

</TABLE>

<PAGE> 12


Three  months  ended June 30, 2001 compared to three  months  ended
June 30, 2000


 Interest Income and Loan Portfolio

       Interest  revenue increased 16% to $4.5  million  for  the
period  ended  June 30, 2001, from $3.9 million  for  the  period
ended  June 30, 2000. The net finance receivable balance  totaled
$67.1 million at June 30, 2001, an increase of 17% from the $57.4
million  at  June 30, 2000. The gross finance receivable  balance
increased  16%  to  $106.7 million at June 30,  2001  from  $92.0
million  at  June  30, 2000. The primary reason interest  revenue
increased was the increase in the outstanding loan portfolio. The
gross  portfolio yield decreased from 23.22% for the period ended
June  30, 2000 to 22.49% for the period ended June 30, 2001.  The
primary  reason  that net finance receivables increased  was  the
increase in the receivable base of several existing branches.

 Computer Software Business

   Sales for the period ended June 30, 2001 were $99,120 compared
to  $116,810  for the period ended June 30, 2000, a  decrease  of
15%.  This decrease was primarily due to lower revenue  from  the
existing customer base and the continued emphasis on the  finance
subsidiary.

 Operating Expenses

       Operating expenses, excluding provision for credit  losses
and  interest expense, increased to $1.9 million for  the  period
ended  June 30, 2001 from $1.7 million for the period ended  June
30,  2000. This increase of 11% was primarily attributable to the
additional staffing of several existing branches, increased  home
office personnel and increased general operating expenses.

 Interest Expense

      Interest expense increased to $995,832 for the period ended
June  30, 2001 as compared to $835,023 for the period ended  June
30,  2000.  This  increase  was due to  an  increase  in  average
outstanding borrowings from $42.1 million to $49.9 million during
the  comparable  periods.  The average  cost  of  funds  borrowed
increased from 7.92% for the period ended June 30, 2000 to  7.98%
for the period ended June 30, 2001.

<PAGE> 13

Analysis of Credit Losses

   Because of the nature of the borrowers under the Contracts and
its  direct  consumer  loan program, the  Company  considers  the
establishment  of  adequate reserves  for  credit  losses  to  be
imperative.  The Company 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 83 Contracts
with  an  aggregate  initial principal  amount  of  approximately
$667,000. As of June 30, 2001, the Company had 303 active pools.

   The  Company  pools  Contracts according  to  branch  location
because  the  branches  purchase contracts in  different  markets
located  in  Florida, Georgia and North Carolina.  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 June 30, 2001, the Company had
established  reserves for losses on Contracts of  $14,114,163  or
18.09% of net outstanding receivables.

<PAGE> 14

<TABLE>
<CAPTION>

   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
                               June 30, 2001         June 30, 2000
                             ---------------------------------------
<S>                        <C> <C>  <C>           <C>  <C> <C>
Contracts
Gross Balance Outstanding      $102,217,743            $88,141,806

                            Dollar                 Dollar
Delinquencies               Amount   Percent*      Amount   Percent*
                           -------   --------     --------  --------
30 to 59 days            $2,096,637    2.05%    $1,973,156   2.24%
60 to 89 days               570,215    0.56%       515,065   0.58%
90   +  days                176,730    0.17%       110,227   0.13%
                         ----------    -----    ----------   -----
Total Delinquencies      $2,843,582             $2,598,448

*Total Delinquencies as
  percent of outstanding
  balance                              2.78%                 2.95%

Direct Loans
Gross Balance Outstanding      $  4,471,708           $  3,898,563

Delinquencies

30 to 59 days              $ 41,706    0.93%      $ 28,812   0.74%
60 to 89 days                16,646    0.37%         5,405   0.14%
90 + days                       609    0.01%        10,671   0.27%
                           --------    -----       -------   -----
Total Delinquencies        $ 58,961               $ 44,888

*Total Delinquencies as a
  percent of outstanding
  balance                              1.31%                 1.15%

</TABLE>

  The  provision  for credit losses was $352,649  for  the  three
month period ended June 30, 2001 as compared to $371,710 for  the
three month period ended June 30, 2000. The Company decreased its
total  reserve percentage from 13.53% for the period  ended  June
30, 2000 to 13.49% for the period ended June 30, 2001. Management
believes that the reserve adjustments made during the three month
period  ended  June  30,  2001 are consistent  with  its  reserve
methodology.

Income Taxes

  The Company's effective tax rate remained relatively consistent
at  37.91% for the three months ended June 30, 2001, as  compared
to 38.54% for the three months ended June 30, 2000.

<PAGE> 15





Liquidity and Capital Resources

The Company's cash flows for the three months ended June 30, 2001
and June 30, 2000 are summarized as follows:

<TABLE>
<CAPTION>
                              Three months ended  Three months ended
                                 June 30, 2001      June 30, 2000
                              --------------------------------------
 <S>                            <C>                <C>
  Cash provided by (used in):
     Operating Activities -      $  1,540,648       $  1,112,446

     Investing Activities -
     (primarily purchase
       of Contracts)               (2,463,127)        (5,817,830)

     Financing Activities             906,317          4,551,095

  Net decrease in cash                (16,162)          (154,289)

</TABLE>

      The  Company's  primary use of working capital  during  the
three  months ended June 30, 2001 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  June  30,
2001  the Company had approximately $26.0 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.


Future Expansion

      The Company currently operates twenty-one branch locations,
fifteen  in  the State of Florida, three in the State of  Georgia
and three in the State of North Carolina. 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 three of our branches  have  reached  this
capacity.

      The  Company intends to continue its expansion through  the
purchase of additional Contracts and the expansion of its  direct
consumer loan program. As the branches continue to add customers,
the  size  of the loan portfolio will continue to grow. With  the
added volume in each branch and as the company adds new branches,
it  will be necessary for the Company to increase the size of its
Line of Credit.

   The  Company  believes that opportunity for receivable  growth
continues  to exist in the States of Florida, Georgia  and  North
Carolina. The Company has identified Columbia, South Carolina  as
an  area where it may open its next branch location during fiscal
2002.  The  Company is also exploring expansion  into  additional
States  where  it currently has no presence. As of this  date  no
commitments have been made for additional expansion.


<PAGE> 16


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 II - Other Information


Item 1.   Legal Proceedings - None

Item 2.   Changes in Securities

   On  June  30,  2001, the Company issued 44,444 shares  of  its
Common  Stock  to the Roger T. Mahan Grantor Trust (the  "Grantor
Trust")  pursuant  to  the  Grantor  Trust's  exercise   of   its
conversion right under a Convertible Promissory Note, dated  June
30,  1995  (the "Grantor Trust Note"), issued by the  Company  in
favor  of  the Grantor Trust.  The aggregate principal amount  of
the  Grantor  Trust Note was $200,000 and the maturity  date  was
June  30, 2001.  The conversion price was $4.50 per share.  As  a
result  of such conversion, the Grantor Trust Note was cancelled.
The issuance of shares of the Company's Common Stock pursuant  to
this  transaction is claimed to be exempt from registration under
the  Securities Act of 1933, as amended, pursuant to Section 4(2)
thereof.

   On  August 9, 2001, the Company issued 111,111 shares  of  its
Common  Stock  to  the  Mahan Family Trust (the  "Family  Trust")
pursuant  to the Family Trust's exercise of its conversion  right
under a Convertible Promissory Note, dated November 30, 1992 (the
"Family  Trust  Note"), issued by the Company  in  favor  of  the
Family Trust.  The aggregate principal amount of the Family Trust
Note  was  $500,000 and the maturity date was November 30,  2001,
subject  to  certain  prepayment rights granted  to  the  Company
thereunder.  Pursuant to such rights, the Company gave notice  on
July 10, 2001 that it intended to prepay the Family Trust Note in
full.    Under  the  terms  of  the  Family  Trust   Note,   this
notification entitled the Family Trust to convert the  note  into
shares of Common Stock, at a conversion price of $4.50 per share.
As   result  of  such  conversion,  the  Family  Trust  Note  was
cancelled.  The issuance of shares of the Company's Common  Stock
pursuant  to  this  transaction is  claimed  to  be  exempt  from
registration  under  the  Securities Act  of  1933,  as  amended,
pursuant to Section 4(2) thereof.

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> 17

                           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
August 14, 2001.


                    NICHOLAS FINANCIAL, INC.
                          (Registrant)


  Date: August 14, 2001         /s/ Peter L. Vosotas
                                -----------------------------
                                Peter L. Vosotas
                                Chairman, President,
                                Chief Executive Officer
                                (Principal Executive Officer)


  Date: August 14, 2001          /s/ Ralph T. Finkenbrink
                                 -----------------------------
                                 Ralph T. Finkenbrink
                                 (Principal  Financial Officer
                                  and Accounting Officer)

<PAGE> 18

                          EXHIBIT INDEX


Item 13. 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> 19

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)

        (b) Reports on Form 8-K

        The Company  did  not  file any Current Reports on  Form  8-K
        during the first quarter ended June 30, 2001.