<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, 1999



    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 31, 1999 there were 2,351,608 shares of common stock
                           outstanding

             This Form 10-QSB consists of 18 pages.


<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, 1999.............................................3

Condensed Consolidated Statements of Income
 for the three months ended June 30, 1999.....................4

Condensed Consolidated Statements of Cash
 Flows for the three months ended June 30, 1999...............5

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

Item 2. Management's Discussion and Analysis of
        the Financial Condition  and Results of
        Operations...........................................10

Part II. Other Information

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

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

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

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

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

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

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

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


<PAGE> 3


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

<TABLE>
<CAPTION>
                                                     June 30,
                                                       1999
                                                  ----------------
<S>                                                 <C>
Assets
Cash                                                 $   269,073
Finance receivables, net                              41,906,154
Accounts receivable                                       22,742
Prepaid expenses and other assets                        344,548
Property and equipment, net                              208,650
Deferred income taxes                                  1,400,056
                                                     -----------
Total assets                                         $44,151,223
                                                     ===========
Liabilities and Shareholders' equity
Line of credit                                       $30,714,549
Notes payable - related parties                        1,648,024
Accounts payable                                       1,935,243
Income taxes payable                                     376,858
Deferred revenues                                        413,627
Other liabilities                                         20,074
                                                     -----------
                                                      35,108,375

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

Common stock, no par: 50,000,000 shares
authorized; 2,351,608  shares issued and
outstanding                                            3,702,587

Retained earnings                                      5,340,261
                                                     -----------
                                                       9,042,848
                                                     -----------
Total liabilities and shareholders' equity           $44,151,223
                                                     ===========
See accompanying notes.

</TABLE>
<PAGE> 4

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

<TABLE>
<CAPTION>
                                              Three months ended
                                                    June 30
                                                1999        1998
                                            ------------------------
<S>                                        <C>          <C>
Revenue:
 Interest income on
  finance receivables                       $2,835,182   $2,078,087
 Sales                                         135,448      109,793
                                            -----------------------
                                             2,970,630    2,187,880

Expenses:
 Cost of sales                                  15,531       22,701
 Marketing                                      91,794       73,492
 Administrative                              1,150,561      855,229
 Provision for credit losses                   250,678      184,457
 Depreciation and amortization                  24,140       25,451
 Interest expense                              623,509      603,063
                                            -----------------------
                                             2,156,213    1,764,393
                                            -----------------------
Operating income before income taxes           814,417      423,487

Income tax expense (benefit):
 Current                                       437,270      203,263
 Deferred                                     (125,000)     (40,000)
                                            -----------------------
                                               312,270      163,263
                                            -----------------------
Net Income                                    $502,147     $260,224
                                            =======================

Earnings per share - Basic                       $0.21        $0.11
                                            =======================
Earnings per share - Diluted                     $0.20        $0.11
                                            =======================

See accompanying notes.

</TABLE>

<PAGE> 5

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

<TABLE>
<CAPTION>
                                       Three months ended June 30
                                            1999         1998
                                       --------------------------
<S>                                     <C>           <C>
Operating activities
Net income                               $  502,147    $  260,224
Adjustments to reconcile net income
  to net cash provided by operating
  activities:
 Depreciation of property and equipment      24,140        25,451
 Provision for credit losses                250,678       184,457
 Deferred income taxes                     (125,000)      (40,000)
 Changes in operating assets and
 liabilities:
  Accounts receivable                           190         3,203
  Prepaid expenses and other assets         (35,704)     (176,077)
  Deferred revenues                          25,683        46,461
  Accounts payable                          199,887       (29,715)
  Other liabilities                          (1,625)        1,083
  Income taxes payable                      376,858        21,122
                                          -----------------------
Net cash provided by operating
  activities                              1,217,254       296,209

Investing activities
Increase in finance receivables,
 net of principal collected              (2,233,361)   (2,773,181)
Purchase of property and equipment          (15,497)      (10,021)
                                          -----------------------
Net cash used by investing activities    (2,248,858)   (2,783,202)

Financing activities
Net proceeds from line of credit
 borrowings and notes payable -
 related party                              791,259     2,224,000
                                          -----------------------
Net cash provided by financing
 activities                                 791,259     2,224,000
                                          -----------------------
Net decrease in cash                       (240,345)     (262,993)

Cash, beginning of period                   509,418       303,960
                                          -----------------------
Cash, end of period                        $269,073       $40,967
                                          =======================

See accompanying notes.

</TABLE>
<PAGE> 6

                     Nicholas Financial, Inc.
     Notes to the Condensed Consolidated Financial Statements
                           (Unaudited)
                          June 30, 1999


1. Basis of Presentation

The   accompanying  unaudited  condensed  consolidated  financial
statements  of  Nicholas Financial  Inc.(the "Company") have been
prepared  in  accordance  with   generally  accepted   accounting
principles for  interim  financial  information  and   with   the
instructions  to  Form  10-QSB  pursuant  to  the  Securities and
Exchange Act of 1934, as amended in Article 10  of Regulation SB,
as  amended.  Accordingly,  they   do  not  include  all  of  the
information   and   footnotes   required  by  generally  accepted
accounting principles for complete financial statements.  In  the
opinion  of  management, all adjustments  (consisting  of  normal
recurring  accruals) considered necessary for a fair presentation
have  been included. Operating results for the three months ended
June  30, 1999 are not necessarily indicative of the results that
may  be  expected for the year ended March 31, 2000. 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, 1999.

2. Earnings Per Share

Basic  earnings  per  share is computed based  on  the  weighted-
average  number of common shares outstanding during the  periods.
Diluted  earnings  per share is computed based on  the  weighted-
average  number  of  common shares plus the assumed  issuance  of
common shares for all potentially dilutive securities.

<PAGE> 7

                     Nicholas Financial, Inc.
     Notes to the Condensed Consolidated Financial Statements
                            (Unaudited)
                           June 30, 1999

  The  following  table  sets forth the computation of Basic and
  Fully Diluted Earnings per Share:

<TABLE>
<CAPTION>
                                           Three months ended
                                                  June 30,
                                           1999           1998
                                       ----------------------------
<S>                                       <C>          <C>
Numerator:

 Numerator for basic earnings
  per share - Net income available
  to common stockholders                   $502,147     $260,224

 Effect of dilutive securities:
     Convertible debt                        24,909       24,909
                                          -----------------------
 Numerator for dilutive earnings
  per share - income available to
  common stockholders after assumed
  conversions                              $527,056     $285,133
                                          =======================
Denominator:

 Denominator for basic earnings
  per share - weighted average
  shares                                  2,351,608    2,357,013
 Effect of dilutive securities: (A)
  Employee stock options                     31,876            -
  Convertible debt                          264,798      264,798
                                          -----------------------
 Dilutive potential common shares           296,674      264,798

  Denominator for diluted earnings
   per share - adjusted weighted-
   average shares and assumed
   conversions                            2,648,282    2,621,811
                                          =======================
Earnings per share - basic                    $0.21       $0.11
                                          =======================
Earnings per share - diluted                  $0.20       $0.11
                                          =======================

</TABLE>

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                                       -       230,700
    Warrants                                      -       333,333


<PAGE> 8

                     Nicholas Financial, Inc.
     Notes to the Condensed Consolidated Financial Statements
                            (Unaudited)
                           June 30, 1999


3. Finance Receivables

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

<TABLE>
<CAPTION>

  <S>                                     <C>
   Finance receivables, gross contract     $67,225,583
    Less:
       Unearned interest                   (15,856,451)
                                           -----------
                                            51,369,132
       Nonrefundable dealer reserves        (7,919,331)
       Allowance for credit losses          (1,543,647)
                                           -----------
       Finance receivables, net            $41,906,154
                                           ===========

</TABLE>

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


4. Line of Credit

The  Company has a $35,000,000 line of credit facility (the Line)
with  BA  Business Credit, Inc. which expires on June  30,  2001.
Borrowings  under the Line bear interest at the Bank  of  America
prime  rate.  The Company also has several LIBOR pricing  options
available.   If  the outstanding balance falls below  $10,000,000
the  Line  bears interest at the Bank of America prime rate  plus
1.75%.  Pledged as collateral for this credit facility are all of
the assets of Nicholas Financial, Inc. and its subsidiaries.


<PAGE> 9


                     Nicholas Financial, Inc.
     Notes to the Condensed Consolidated Financial Statements
                            (Unaudited)
                           June 30, 1999

5. Notes Payable - Related Parties

<TABLE>
<CAPTION>
<S>                                              <C>
Notes payable consisted of the following:

Notes  payable, due  through  January 2002,
unsecured,  subordinated to  the Line, with
interest  at  varying  rates up to 12% with
quarterly and semiannual interest payments.
The notes  are convertible at the option of
the holder, into  common  shares  at prices
from $4.50 to $6.00 per share.                    $1,150,000

Notes payable,  unsecured  interest at 12%,
quarterly  interest due through April 2000,
at which time  the entire principal balance
and unpaid interest is due, subordinated to
the Line.  The  note  is convertible at the
option of the holder, into common shares at
$8.25 per share.                                     200,000

Note  payable,  unsecured, interest at 12%,
principal  and  interest  due through March
2000.                                                290,470

Note payable, unsecured, interest at   12%,
quarterly interest due through August 1999,
at which  time the entire principal balance
is due.                                                7,554
                                                  ----------
                                                  $1,648,024
                                                  ==========
</TABLE>
<PAGE> 10

         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, 1999 to $502,147 from $260,224 for the three month
period  ended  June  30,  1998. Earnings  for  the  quarter  were
favorably  impacted by growth in the outstanding loan  portfolio,
improved portfolio performance and an improvement in the cost  of
funds.   The   Company's  NDS  subsidiary  did   not   contribute
significantly  to  consolidated operations  in  the  three  month
periods ended June 30, 1999 or 1998.

<TABLE>
<CAPTION>
                                        Three Months Ended June 30,
                                              1999       1998
                                       ----------------------------
<S>                                     <C>            <C>
Average Net Finance Receivables(1)       $50,413,662    $40,782,423
Average Indebtedness(2)                   31,663,056     26,022,255
Total Revenues                             2,835,182      2,078,087
Interest Expense                             623,509        603,063
                                         --------------------------
Net Interest Income                        2,211,673      1,475,024
Gross Portfolio Yield(3)                      22.50%         20.38%
Average Cost of Borrowed Funds(2)              7.88%          9.27%
                                         --------------------------
Net Interest Spread(4)                        14.62%         11.11%
Net Portfolio Yield(3)                        17.55%         14.47%
Write-off to Liquidation(5)                    5.31%          7.03%
Net Charge-Off Percentage(6)                   4.49%          6.00%

<FOOTNOTE>

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

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

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

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

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

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

</TABLE>
<PAGE> 11

Three  months ended June 30, 1999 compared to three months  ended
June 30, 1998

 Interest Income and Loan Portfolio

       Interest  income  on  finance  receivables,  predominately
finance  charge  income, increased 36% to $2.8  million  for  the
period  ended  June 30, 1999, from $2.1 million  for  the  period
ended  June 30, 1998. The net finance receivable balance  totaled
$41.9 million at June 30, 1999, an increase of 20% from the $35.0
million  at  June 30, 1998. The gross finance receivable  balance
increased  22%  to  $67.2 million at June  30,  1999  from  $55.0
million  at  June  30, 1998. The primary reason interest  revenue
increased was the increase in the outstanding loan portfolio. The
gross  portfolio yield increased from 20.38% for the period ended
June  30, 1998 to 22.50% for the period ended June 30, 1999.  The
primary  reason that the gross portfolio yield increased was  the
result  of  lower  than anticipated write-off's on  the  existing
portfolio.  The  primary  reason  that  net  finance  receivables
increased  was  the  opening  of one additional  branch  and  the
increased size of several existing branches.

 Computer Software Business

   For the three month period ended June 30, 1999 revenues of NDS
were  $135,448 compared with revenues of $109,793 for  the  three
month  period  ended  June 30, 1998, an increase  of  23%.   This
increase was primarily due to an increase in the installations of
upgrades  to  existing customers, driven by the year 2000  issue.
Operating  income for the three months ended June  30,  1999  was
$395  compared with an operating income of $18,118 for 1998.  The
Company  expects  both operating revenues and income  of  NDS  to
remain stable, although no assurance can be given in this regard.

 Operating Expenses

       Operating expenses, excluding provision for credit  losses
and  interest  expense, increased to $1,282,026  for  the  period
ended  June 30, 1999 from $976,873 for the period ended June  30,
1998.  This increase of 31% was  attributable  to the opening  of
one  additional  office,  increased  home  office  personnal  and
increased general operating expenses.

 Interest Expense

     Interest  expense increased to $623,509 for the period ended
June  30, 1999 as compared to $603,063 for the period ended  June
30,  1998.  This  increase  was due to  an  increase  in  average
outstanding borrowings from $26.0 million to $31.7 million during
the  comparable periods. The impact of this increase was  offset,
in part by a decrease in the average cost  of funds borrowed from
9.27% for the period ended June  30, 1998 to 7.88% for the period
ended June 30, 1999 .

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 68 Contracts
with  an  aggregate  initial principal  amount  of  approximately
$552,000. As of June 30, 1999, the Company had 211active pools.

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


<PAGE> 12

   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, 1999, the Company had
established  reserves for losses on Contracts  of  $9,462,978  or
14.08% of gross outstanding receivables under the Contracts.

   The  provision for credit losses was $250,678  for  the  three
month period ended June 30, 1999 as compared to $184,457 for  the
three  month  period ended June 30, 1998. This increase  was  due
primarily  to  the  20%  increase in the net  finance  receivable
balance as of June 30, 1999 compared to June 30, 1998.

   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>

                          Three months ended  Three months ended
                             June 30, 1999      June 30, 1998
                           ----------------     ---------------
<S>                   <C>    <C>   <C>      <C>  <C>     <C>
Contracts
Gross Balance Outstanding     $64,799,801         $53,698,222

                        Dollar                 Dollar
Delinquencies           Amount    Percent*     Amount   Percent*
                        -------   --------     ------   --------

30 to 59 days         $1,633,902    2.52%   $1,830,953    3.41%
60 to 89 days            431,504    0.67%      409,741    0.76%
90 + days                118,106    0.18%      225,804    0.42%
                       ---------    -----    ---------    -----
Total Delinquencies   $2,183,512            $2,466,498

*Total Delinquencies
  as percent of
  outstanding balance               3.37%                 4.59%

Direct Loans
Gross Balance Outstanding      $2,425,782          $1,276,202

Delinquencies

30 to 59 days            $8,273     0.34%       $4,009    0.31%
60 to 89 days             8,812     0.36%        1,380    0.11%
90 + days                   647     0.03%          692    0.06%
                          -----    ------        -----    -----
Total Delinquencies     $17,732                 $6,081

*Total Delinquencies
 as a percent of
 outstanding balance                0.73%                 0.48%

</TABLE>
<PAGE> 13

Income Taxes

  The Company's effective tax rate remained relatively consistent
at 38.33% and 38.55% for the three months ended June 30, 1999 and
1998, respectively.

Liquidity and Capital Resources

The Company's cash flows for the three months ended June 30, 1999
and June 30, 1998 are summarized as follows:

<TABLE>
                                 Three months ended  Three months ended
                                      June 30,            June 30,
                                       1999                 1998
                                ----------------------------------------
<S>                               <C>                  <C>
  Cash provided by (used in):
        Operating Activities -     $1,217,254           $    296,209
        Investing Activities -
         (primarily purchase
           of Contracts)           (2,248,858)            (2,783,202)

        Financing Activities          791,259              2,224,000

  Net (decrease) in cash             (240,345)              (262,993)

</TABLE>

      The  Company's  primary use of working capital  during  the
three  months  ended June 30, 1999 was funding  the  purchase  of
Contracts.   The  Contracts were financed  substantially  through
borrowings from the Company's Line of credit. The line of  credit
is  secured primarily by Contracts, and available borrowings  are
based  on  a percentage of qualifying Contracts. As of  June  30,
1999  the Company had approximately $4.3 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 Company is currently negotiating  with
its  lending  source  to increase its Line  of  credit  from  $35
million to $40 million.

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


Future Expansion

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

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

      The  Company believes that opportunity for growth continues
to  exist  in the States of Florida and Georgia and continues  to
evaluate   other  markets  in  these  states.  The  Company   has
identified  Charlotte, North Carolina as  its  location  for  the
Company's  sixteenth  branch location. The Company  is  currently
evaluating other markets in North Carolina for possible expansion
during fiscal 2000.

<PAGE> 14

Impact of Year 2000

     The year 2000 Issue is the result of computer programs being
written  using  two  digits  rather  than  four  to  define   the
applicable  year.  Any  of  the Company's  computer  programs  or
hardware that have date-sensitive software or embedded chips  may
recognize a date using "00" as the year 1900 rather than the year
2000.  This  could result in a system failure or  miscalculations
causing disruptions of operations, including, among other things,
a  temporary inability to process transactions, send invoices, or
engage in similar business activities.

           The  Company's  plan to resolve the  Year  2000  Issue
involves  the  following  four phases:  assessment,  remediation,
testing,  and  implementation. To date,  the  Company  has  fully
completed   its   assessment  of  all  systems  that   could   be
significantly affected by the Year 2000. The completed assessment
indicated  that  some  of  the Company's significant  information
technology  systems  could be affected  including  the  Company's
internally developed proprietary accounting application  software
which  is  the  integral component of the Financial  subsidiary's
data  processing systems and the Company's commercial application
software  which is sold through the Company's software subsidiary
NDS.   In   addition  the  Company  has  identified   Year   2000
deficiencies within its report-writer which the Company  utilizes
to  produce  most  of  its  internal accounting  and  operational
reports.

          Based on recent assessments the Company determined that
it  will be required to modify or replace significant portions of
its  software  and  certain hardware so that those  systems  will
properly  utilize  dates beyond December 31,  1999.  The  Company
presently  believes  that with modifications or  replacements  of
existing  software and certain hardware, the Year 2000 Issue  can
be mitigated. However, if such modifications and replacements are
not  completed timely, the Year 2000 Issue could have a  material
impact on the operations of the Company.

      For  its  information  technology exposures,  to  date  the
Company  is 100% complete on the remediation phase. Once software
is  reprogrammed  or  replaced for a system, the  Company  begins
testing  and  implementation. To date the Company  has  completed
100%  of  its  testing and has implemented 75% of its  remediated
systems.  All  remediated  systems  will  be  fully  tested   and
implemented by August 31, 1999, with 100% completion targeted for
September 30, 1999.

      The  remediation  of  operating  equipment  is  not a  Year
2000 issue with the Company because it has no operating equipment
that would be affected, therefore no testing is required.

      The  Company  has  queried  its  significant suppliers  and
vendors  that do not share information systems with the  Company.
To  date, the Company is not aware of any external agent  with  a
Year  2000  issue  that  would materially  impact  the  Company's
results  of operations, liquidity, or capital resources. However,
the Company has no means of ensuring that external agents will be
Year  2000  ready. The inability of external agents  to  complete
their  Year  2000  resolution process in a timely  fashion  could
materially  impact  the Company. The effect of non-compliance  by
external agents is not determinable.

      The  Company   will  utilize  both  internal  and  external
resources  to  reprogram,  or replace, test,  and  implement  the
software and operating equipment for Year 2000 modifications. The
total  cost of the Year 2000 project is estimated at $25,000  and
is  being  funded  through operating cash  flows.  To  date,  the
Company has incurred approximately $15,000 related to all  phases
of  the Year 2000 project. The total remaining project costs  are
attributable  to  the  purchase of  new  software  and  operating
equipment, which will be capitalized.

<PAGE> 15

      Management  of  the  Company  believes  it has an effective
program  in  place  to resolve the Year 2000 issue  in  a  timely
manner.  As  noted above, the Company has not yet  completed  all
necessary phases of the Year 2000 program. In the event that  the
Company  does  not  complete any additional phases,  the  Company
might be unable to invoice customers, collect payments or produce
all  the  necessary reports to operate effectively. In  addition,
disruptions  in  the economy generally resulting from  Year  2000
issues  could  also materially adversely affect the Company.  The
Company  could  be  subject to litigation  for  computer  systems
record  failure.  The  amount  of potential  liability  and  lost
revenue cannot be reasonably estimated at this time.

      The  Company  currently  has  no  contingency plan in place
in  the  event it does not complete all phases of the  Year  2000
program.

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 - 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.

<PAGE> 16


                           SIGNATURES

   In  accordance with the requirements of the Securities Act  of
1934, the Registrant certifies that it has reasonable grounds  to
believe that it meets all of the requirements for filing on  Form
10-QSB  and authorized this Report to be signed on its behalf  by
the undersigned, in the City of Clearwater, State of Florida,  on
August 11, 1999.


                    NICHOLAS FINANCIAL, INC.
                          (Registrant)


  Date: August 11, 1999         /s/ Peter L. Vosotas
                                ------------------------
                                Peter L. Vosotas
                                Chairman, President, Chief
                                Executive Officer
                                (Principal Executive Officer)


  Date: August 11, 1999         /s/ Ralph T. Finkenbrink
                                ---------------------------
                                Ralph T. Finkenbrink
                                (Principal Financial Officer
                                 and Accounting Officer)

<PAGE> 17

                          EXHIBIT INDEX


Item 13. Exhibits and Reports on Form 8-K


       (a)  Exhibits


3.1     Articles of Incorporation of Nicholas Financial,
        Inc. and By-Laws

        Incorporated by reference to the Company's Form
        10-SB. File No. 0-26680

4.1     Stock Certificate

        Incorporated by reference to Exhibit 4.1 to
        the Company's Form 10-SB (File No. 0-26680)

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)

10.1.2  Loan Modification Agreement dated January 14, 1994

        Incorporated by reference to Exhibit 10.1.2 to the
        Company's Form 10-SB (File No. 0-26680)

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)

10.1.4  Second  Loan  Modification  Agreement  dated
        June 3, 1994

        Incorporated by  reference  to  Exhibit 10.1.4
        to the  Company's Form 10-SB (File No. 0-26680)

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)

10.1.6  Amendment No. 4 to Loan Agreement and Security
        Agreement

        Incorporated by reference to Exhibit 10.1.6 to
        the  Company's Form 10-SB (File No. 0-26680)

10.1.7  Fifth Loan Modification 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  Sixth Loan Modification 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

<PAGE> 18

10.1.9  Amendment No. 7 to Loan and Security 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

10.2.0  Amendment No. 8 to Loan and Security 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

10.2.1  Amendment No. 9 to Loan and Security 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


27      Financial Data Schedule (for SEC use only)

        (b) Reports on Form 8-K
            None