Exhibit 23.1

                        Consent of Independent Auditors

     We consent to the  incorporation  by reference in this Annual  Report (Form
10-K) of Litchfield Financial  Corporation of our report dated January 31, 1997,
included in the 1996  Annual  Report to  Stockholders  of  Litchfield  Financial
Corporation.

     We  also  consent  to  the   incorporation  by  reference  in  Registration
Statements  (Forms S-8 Nos.  333-11529 and 333-11531)  filed with the Securities
and Exchange Commission  pertaining to various Litchfield Financial Stock Option
Plans of our report  dated  January 31, 1997,  with respect to the  consolidated
financial  statements  of  Litchfield  Financial  Corporation   incorporated  by
reference in the Annual Report (Form 10-K) for the year ended December 31, 1996



                                                      ERNST & YOUNG LLP


Boston, Massachusetts
March 24, 1997