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 DECEMBER 31, 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 January 31st, 2002 there were 4,980,860 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
        December 31, 2001......................................3

        Condensed Consolidated Statements of Income
        for the three and nine months ended
        December 31, 2001 and 2000.............................4

        Condensed Consolidated Statements of Cash
        Flows for the nine months ended
        December 31, 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....................................17

Item 2.  Changes in Securities................................17

Item 3.  Defaults upon Senior Securities......................17

Item 4.  Submission of Matters to a Vote of Security Holders..17

Item 5.  Other Information....................................17

Item 6.  Exhibits and Reports on Form 8-K.....................17

         Signatures...........................................18

         Exhibit Index........................................19

<PAGE> 3

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

<TABLE>
<CAPTION>
                                                   December 31
                                                       2001
                                                  -------------
<S>                                               <C>
Assets
Cash                                               $   303,075
Finance receivables, net                            70,780,073
Accounts receivable                                     13,147
Prepaid expenses and other assets                      651,872
Property and equipment, net                            284,656
Deferred income taxes                                  820,036
                                                  -------------
Total assets                                       $72,852,859
                                                  =============

Liabilities
Line of credit                                     $50,973,426
Notes payable - related party                          491,281
Accounts payable                                     2,739,112
Derivatives                                          1,687,902
Deferred revenues                                      685,805
                                                  -------------
Total liabilities                                   56,577,526

Shareholders' equity
Preferred stock, no par: 5,000,000 shares
 authorized;none issued and outstanding                      -
Common stock, no par: 50,000,000 shares
 authorized; 4,980,860 shares issued and
 outstanding                                         4,374,025
Other comprehensive loss                            (1,685,305)
Retained earnings                                   13,586,613
                                                  -------------
                                                    16,275,333
                                                  -------------
Total liabilities and shareholders' equity         $72,852,859
                                                  =============

See accompanying notes.

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

<TABLE>
<CAPTION>

                                   Three months ended        Nine months ended
                                       December 31               December 31
                                     2001        2000          2001        2000
                                 ---------------------------------------------------
<S>                              <C>         <C>          <C>         <C>
Revenue:
Interest income on
 finance receivables              $4,923,210  $4,329,865   $14,312,868  $12,489,935
Sales                                 85,852      90,744       274,894      306,611
                                 ---------------------------------------------------
                                   5,009,062   4,420,609    14,587,762   12,796,546
Expenses:
Cost of sales                         15,932      19,857        59,494       65,485
Marketing                            134,724     100,816       383,196      318,258
Administrative                     1,846,227   1,554,953     5,328,805    4,624,829
Provision for credit losses          500,679     390,312     1,281,104    1,067,101
Depreciation and amortization         60,365      40,500       165,365      106,500
Interest expense                     949,068   1,002,433     2,955,481    2,792,944
                                 ---------------------------------------------------
                                   3,506,995   3,108,871    10,173,445    8,975,117
                                 ---------------------------------------------------
Operating income before
 income taxes                      1,502,067   1,311,738     4,414,317    3,821,429

Income tax expense (benefit):
 Current                              392,265     504,182     1,403,411   1,547,140
 Deferred                             161,269           -       250,852     (75,000)
                                 ---------------------------------------------------
                                      553,534     504,182     1,654,263   1,472,140
                                 ---------------------------------------------------
Net Income                          $ 948,533   $ 807,556    $2,760,054  $2,349,289
                                 ===================================================
Earnings per share - basic              $0.19       $0.17         $0.57       $0.50
                                 ===================================================
Earnings per share - diluted            $0.18       $0.16         $0.53       $0.46
                                 ===================================================

See accompanying notes.

</TABLE>
<PAGE> 5

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

<TABLE>
<CAPTION>
                                       Nine months ended December 31
                                           2001            2000
                                     ---------------------------------
<S>                                   <C>            <C>
Operating activities
Net income                              $ 2,760,054    $ 2,349,289
Adjustments to reconcile net
 income to net cash provided
  by operating activities:
Depreciation of property and equipment      165,365        106,500
Provision for credit losses               1,281,104      1,067,101
Deferred income taxes                       250,852        (75,000)
Changes in operating assets and
 liabilities:
Accounts receivable                           1,321          2,896
Prepaid expenses and other assets          (102,686)      (247,393)
Deferred revenues                            74,076         93,208
Accounts payable                           (275,795)      (420,885)
Income taxes payable                        (93,819)        15,139
                                         ---------------------------
Net cash provided by operating
 activities                               4,060,472      2,890,855

Investing activities
Increase in finance receivables,
 net of principal collected              (7,020,309)   (10,908,418)
Purchase of property and equipment         (116,262)      (129,594)
                                         ---------------------------
Net cash used in investing activities    (7,136,571)   (11,038,012)

Financing activities
Issuance (repayment) of notes
 payable - related party                    223,274       (200,000)
Net proceeds from line of credit          2,850,000      8,558,500
Issuance (repurchase) of common stock        72,733       (126,941)
                                         ---------------------------
Net cash provided by financing
 activities                               3,146,007      8,231,559
                                         ---------------------------
Net increase in cash                         69,908         84,402

Cash, beginning of period                   233,167        259,183
                                         ---------------------------
Cash, end of period                        $303,075       $343,585
                                         ===========================

See accompanying notes.

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

                           December 31, 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  and
nine months ended December 31, 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

On August 8, 2001, the Company declared a two-for-one stock split in
the form of a stock dividend payable on September 10, 2001 to
shareholders of record as of the close of business on August 28, 2001.
All applicable share and per share amounts in the accompanying
unaudited financial statements have been retroactively adjusted to
take into account the effect of this split.

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

<PAGE> 7

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

<TABLE>
<CAPTION>

                                      Three months ended    Nine months ended
                                          December 31,         December 31,
                                         2001      2000      2001       2000
                                     --------------------------------------------
<S>                                  <C>        <C>       <C>         <C>
Numerator:

Numerator for basic earnings per
 share - Net income available to
 common stockholders                  $948,533   $807,556  $2,760,054  $2,349,289

Effect of dilutive securities:
  Convertible debt                           -     15,283      17,491      46,391
                                     --------------------------------------------
Numerator for dilutive earnings
 per share - income available to
 common stockholders after assumed
 conversions                          $948,533   $822,839  $2,777,545  $2,395,680
                                     ============================================
Denominator:
Denominator for basic earnings per
 share - weighted average shares     4,980,860  4,668,940   4,831,586   4,686,124

Effect of dilutive securities: (A)
 Employee stock options                294,768    102,984     290,794     118,756
 Convertible debt                            -    355,612     135,910     359,278
                                     --------------------------------------------
Denominator for diluted earnings
 per share - adjusted weighted-
 average sharesand assumed
 conversions                         5,275,628  5,127,536   5,258,290   5,164,158
                                     ============================================
Earnings per share - basic               $0.19      $0.17       $0.57       $0.50
                                     ============================================
Earnings per share - diluted             $0.18      $0.16       $0.53       $0.46
                                     ============================================

Footnote A:
      The  following  options  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                                  -    105,500           -      58,833

</TABLE>

<PAGE> 8

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


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        $111,884,862
    Less:
       Unearned interest                        (26,388,932)
                                               -------------
                                                 85,495,930
       Nonrefundable dealer reserves            (11,063,746)
       Allowance for credit losses               (3,652,111)
                                               -------------
       Finance receivables, net                $ 70,780,073
                                               =============
</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.


5. Notes Payable - Related Party

Notes payable consisted of the following:

Note payable, unsecured, interest at 9.5%, principal
and interest due through August 2002, at which time
the entire principal balance is due.                    491,281

<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%, maturing on August 1, 2003.

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%,  matuing  on
May 17, 2004.

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.

On October 5, 2001 the Company entered into an interest rate swap with
a notional amount of $10 million at a fixed rate of 3.85%, maturing on
October 5, 2004.

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)


6. Derivatives and Hedging  (continued)

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 ($1.69m) as of December 31, 2001. The fair value of  the
options,  approximately ($2.6k), was accounted for in the consolidated
statement of income as a decrease to current period earnings.


<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
December 31, 2001 to $948,533 from $807,556 for the three month period
ended  December  31,  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 December 31, 2001 or 2000.

   Consolidated net income increased for the nine month  period  ended
December  31,  2001 to $2,760,054 from $2,349,289 for the  nine  month
period ended December 31, 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 nine month periods ended December 31, 2001 or 2000.

<TABLE>
<CAPTION>
                           Three Months Ended         Nine Months Ended
                               December 31               December 31
                             2001        2000         2001         2000
                        ---------------------------------------------------
<S>                     <C>          <C>          <C>          <C>

Average Net Finance
Receivables (1)          $84,882,208  $74,852,495  $82,919,199  $71,646,186

Average Indebtedness(2)   50,611,434   47,689,890   50,271,434   45,502,779

Total Interest Revenues    4,923,210    4,329,865   14,312,868   12,489,935

Interest Expense             949,068    1,002,433    2,955,481    2,792,944
                          --------------------------------------------------
Net Interest Income        3,974,142    3,327,432   11,357,387    9,696,991

Gross Portfolio Yield(3)      23.20%       23.14%       23.01%       23.24%

Average Cost of
 Borrowed Funds(2)             7.50%        8.41%        7.84%        8.18%
                           -------------------------------------------------
Net Interest Spread(4)        15.70%       14.73%       15.17%       15.06%

Net Portfolio Yield(3)        18.73%       17.78%       18.26%       18.05%

Write-off to Liquidation(5)   10.06%        9.02%        8.97%        7.68%

Net Charge-Off Percentage(6)   9.10%        7.75%        7.92%        6.50%



<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  December 31, 2001 compared to three  months  ended
December 31, 2000


 Interest Income and Loan Portfolio

       Interest  revenue increased 14% to $4.9 million for the  period
ended  December  31,  2001, from $4.3 million  for  the  period  ended
December  31,  2000. The net finance receivable balance totaled  $70.8
million at December 31, 2001, an increase of 14% from $61.9 million at
December 31, 2000. The gross finance receivable balance increased  14%
to  $111.9 million at December 31, 2001 from $98.1 million at December
31,  2000.  The  primary  reason interest revenue  increased  was  the
increase in the outstanding loan portfolio. The gross portfolio  yield
increased from 23.14% for the period ended December 31, 2000 to 23.20%
for  the  period ended December 31, 2001. The primary reason that  net
finance  receivables  increased  was the  opening  of  two  additional
offices.

 Computer Software Business

   Sales  for the period ended December 31, 2001 were $85,852 compared
to  $90,744 for the period ended December 31, 2000, a decrease of  5%.
This  decrease  was  primarily due to a decrease in new  installations
during the ended December 31, 2001.

 Operating Expenses

       Operating  expenses, excluding provision for credit losses  and
interest  expense,  increased to $2.1 million  for  the  period  ended
December 31, 2001 from $1.7 million for the period ended December  31,
2000.  This increase of 20% was primarily attributable to the  opening
of  two  additional  branches, increased  home  office  personnel  and
increased general operating expenses.

 Interest Expense

       Interest  expense decreased to $949,068 for  the  period  ended
December  31,  2001  as compared to $1,002,433 for  the  period  ended
December 31, 2000. This decrease was due to a decrease in the  average
cost  of  funds borrowed from 8.41% for the period ended December  31,
2000  to  7.50% for the period ended December 31, 2001.  This decrease
was  offset in part by an increase in the outstanding borrowings  from
$47.7 million to $50.6 million during the comparable periods.

<PAGE> 13

Nine  months  ended  December 31, 2001 compared to nine  months  ended
December 31, 2000


Interest Income and Loan Portfolio

       Interest revenue increased 15% to $14.3 million for the  period
ended  December  31,  2001, from $12.5 million for  the  period  ended
December  31,  2000. The net finance receivable balance totaled  $70.8
million at December 31, 2001, an increase of 14% from $61.9 million at
December 31, 2000. The gross finance receivable balance increased  14%
to  $111.9 million at December 31, 2001 from $98.1 million at December
31,  2000.  The  primary  reason interest revenue  increased  was  the
increase in the outstanding loan portfolio. The gross portfolio  yield
decreased from 23.24% for the period ended December 31, 2000 to 23.01%
for  the  period ended December 31, 2001. The primary reason that  net
finance  receivables  increased  was the  opening  of  two  additional
offices.

 Computer Software Business

   Sales for the period ended December 31, 2001 were $274,894 compared
to $306,611 for the period ended December 31, 2000, a decrease of 10%.
This  decrease  was  primarily due to a decrease in new  installations
during the period ended December 31, 2001.

 Operating Expenses

       Operating  expenses, excluding provision for credit losses  and
interest  expense,  increased to $5.9 million  for  the  period  ended
December 31, 2001 from $5.1 million for the period ended December  31,
2000.  This increase of 16% was primarily attributable to the  opening
of  two  additional  branches, increased  home  office  personnel  and
increased general operating expenses.

 Interest Expense

       Interest  expense increased to $3.0 million for the period  ended
December  31,  2001  as compared to $2.8 million for  the  period  ended
December  31,  2000.  This increase was due to an  increase  in  average
outstanding  borrowings from $45.5 million to $50.3 million  during  the
comparable  periods. The average cost of borrowed funds  decreased  from
8.18% for the nine month period ended December 31, 2000 to 7.84% for the
nine month period ended December 31, 2001.

<PAGE> 14

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  74 Contracts with an aggregate  initial  principal
amount of approximately $600,000. As of December 31, 2001, the Company
had 344 active pools.

  The Company pools Contracts according to branch location because the
branches  purchase contracts in different markets located in  Florida,
Georgia, North Carolina and South 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  December 31, 2001, the  Company  had  established
reserves  for  losses on Contracts of $14,464,194  or  17.70%  of  net
outstanding receivables.

<PAGE> 15

   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>

                             Nine Months Ended      Nine Months Ended
                             December 31, 2001      December 31, 2000
                            -------------------     -------------------
<S>                         <C> <C>     <C>        <C>  <C>    <C>
Contracts
Gross Balance Outstanding        $107,053,507           $93,829,707

                             Dollar                 Dollar
Delinquencies                Amount      Percent*   Amount      Percent*

30 to 59 days            $ 2,486,640      2.32%     $ 2,578,104   2.75%
60 to 89 days                940,610      0.88%       1,406,290   1.50%
90 + days                    370,151      0.35%         470,497   0.50%
                         -----------      -----     -----------   -----
Total Delinquencies       $3,797,401                 $4,454,891

*Total Delinquencies as
 percent of outstanding balance           3.55%                   4.75%

Direct Loans
Gross Balance Outstanding         $ 4,831,355            $ 4,257,432

Delinquencies

30 to 59 days               $ 49,542      1.03%        $ 49,385   1.15%
60 to 89 days                 28,770      0.60%          19,040   0.45%
90 + days                     19,521      0.40%          18,963   0.45%
                            --------      -----        --------   -----
Total Delinquencies         $ 97,833                   $ 87,388

*Total Delinquencies as a
percent of outstanding balance            2.03%                   2.05%

</TABLE>

The  provision  for  credit losses was $500,679 for  the  three  month
period  ended  December 31, 2001 and $1,281,104  for  the  nine  month
period  ended December 31, 2001 as compared to $390,312 for the  three
month period ended December 31, 2000 and $1,067,101 for the nine month
period ended December 31, 2000. The Company's total reserve percentage
decreased  from 13.34% for the period ended March 31, 2001  to  13.15%
for  the period ended December 31, 2001. Management believes that  the
reserve adjustments made during the three and nine month periods ended
December 31, 2001 are consistent with its reserve methodology.

Income Taxes

   The Company's effective tax rate decreased to 36.85% and 37.47% for
the  three  and  nine months ended December 31, 2001, as  compared  to
38.44%  and  38.52% for the three and nine months ended  December  31,
2000, respectively.


<PAGE> 16

Liquidity and Capital Resources

The  Company's cash flows for the nine months ended December 31,  2001
and December 31, 2000 are summarized as follows:

<TABLE>
<CAPTION>
                                  Nine months ended  Nine months ended
                                     December 31,      December 31,
                                         2001              2000
                                -----------------------------------------
  <S>                               <C>              <C>
  Cash provided by (used in):
      Operating  Activities  -       $  4,060,472     $  2,890,855
      Investing Activities -
       (primarily purchase of
        Contracts)                     (7,136,571)     (11,038,012)
      Financing Activities              3,146,007        8,231,559
                                    --------------------------------
  Net increase in cash                     69,908           84,402

</TABLE>

      The  Company's  primary  use  of working capital during the nine
months  ended  December 31, 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 December  31,  2001  the
Company  had approximately $24.0 million available under the  line  of
credit.  The  Company is currently negotiating to extend the  maturity
date  of  its  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-two  branch  locations,
fifteen in the State of Florida, three in the State of Georgia,  three
in the State of North Carolina and one in the State of South 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, North  Carolina
and  South  Carolina. The Company has identified Ohio and Virginia  as
areas  where  it may open additional branches during the remainder  of
fiscal 2002 and beyond. As of this date no commitments have been  made
for additional expansion.

<PAGE> 17


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  August  8,  2001,  Nicholas Financial, Inc. announced  that  its
Board  of  Directors  had 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.

  The  Company also announced that its Board of Directors had approved
the  Company's  second stock repurchase plan. The plan authorizes  the
repurchase of up to 5% of the Company's outstanding common  stock,  or
approximately   250,000   shares,   as   adjusted   to   reflect   the
aforementioned  two-for-one  stock split.  This  authorization  is  in
addition  to  the original September 23, 1998 repurchase authorization
of  120,000  shares (5% of the Company's outstanding common  stock  at
that time), which, as of August 7, 2001, had been completely utilized.



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> 18
                              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 February 13, 2002.


                       NICHOLAS FINANCIAL, INC.
                             (Registrant)


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


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

<PAGE> 19

                             EXHIBIT INDEX




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


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

<PAGE> 20

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 quarter ended December 31, 2001