Sandra Mbindyo attacked Lyndsey MacDonald at the victim's flat in Glasgow's Newlands last September.
She struck after Lyndsey, 31, got a loan to try to bail out the struggling business of Mbindyo's Kenyan husband.
The 59-year-old had been receiving chemotherapy and radiotherapy at the time for cancer.
She told police: "I deserve to be here for what I did to Lyndsey."
Today at Glasgow Sheriff Court, Mbidnyo was ordered to pay Lyndsey £750 in compensation, was tagged for 12 months and supervised by social workers for 18 months.
Mbindyo went to see her niece and her 60-year-old sister Carol MacDonald.
Prosecutor Lauren McRobert said: "At the beginning of September 2018 a financial dispute arose.
"Carol MacDonald made repeated attempts for Mbindyo to come to their home to discuss matters."
Carol later left to walk her dog leaving the pair in the flat and Mbindyo turned on her niece.
Miss McRobert explained: "Mbindyo followed her and asked for a cup of coffee
"Lyndsey felt a sharp pain in her back.
"She turned round to see her aunt with a large kitchen knife.
"There was blood on the blade. As this point. Lyndsey realised she had been stabbed.”
Mbindyo then struck again as her niece desperately tried to defend herself.
The attack eventually stopped and her sister found her daughter covered in blood and Mbindyo calmly smoking in the kitchen.
When asked what had happened she said: "I do not know - I do not know."
Lyndsey suffered wounds to her shoulder and arm which needed nine stitches.
MbIndyo claimed she had been "confused" at the time and told police she was "sorry", adding: "I was just mad."
John Kilcoyne, defending, said: "She was married and there was a £4,000 payday loan her niece took out in her name.
"This was to buy a van for her husband's business. The business was unsuccessful and could not pay it back."
The court was told Mbindyo, of the city’s Govan, has since recovered from cancer.