Rifco : Fourth Quarter Results ending March 31,2021

For the year ended March 31, 2021

MANAGEMENT'S DISCUSSION AND ANALYSIS

The following discussion should be read in conjunction with the audited consolidated financial statements for the year ended March 31, 2021 and 2020 (financial statements) and the notes thereto. Historical results should not be taken as indicative of future operations. The information in this report is up to date as of June 15, 2021.

The financial statements of Rifco Inc. (the Company) have been prepared in compliance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and adopted by the Chartered Professional Accountants of Canada (CPA).

The Company's website is [www.rifco.net] and all previous [www.sedar.com].

Rifco Overview	2
Strategic Perspective	2
COVID-19	3
Market Perspective	3
Strategic Review	4
Corporate Update	4
Results of Operations	5
Comparative Results for the Year	7
Asset Review	13

1. Finance Receivables
2. Cash Holdback and Over-Collateralization in Finance Receivables Securitized
3. Deferred Income Tax Asset
4. Provision for Impairment

public Company filings are available through SEDAR

Financial Capacity, Liability, and Liquidity Review	14
(i)	Facility availability summary
(ii)	Cash flow measurements
(iii) Equity
(iv) Leverage measurements
Contractual Obligations	18
Management and Board of Directors Compensation	19
Related Party Balances and Transactions	19
Discussion of Fourth Quarter Results	20
Risk Factors and Management	22
Description of Non-IFRS Measures	25

1

Cautionary Statement

Additional information relating to the Company is available on SEDAR at www.sedar.com. This Management's Discussion and Analysis (MD&A) report may contain certain forward-looking statements, including statements regarding the business and anticipated financial performance of Rifco. The users of forward-looking statements are cautioned that actual results may vary from the forward-looking information. The Company is subject to material risk factors that could cause actual results to differ materially from the forward-looking statements. The Company is subject to two main material risks, these being loan performance and continued access to capital. All future looking statements are made with the assumption that loans will perform as modelled and that the Company will continue to have access to reasonably priced capital in amounts sufficient to execute its business plan. When future looking statements are made, they will be updated within the normal course of quarterly and annual financial statements.

Description of Non-IFRS Measures

Throughout this MD&A, management uses terms and ratios which do not have a standardized meaning under IFRS and are unlikely to be comparable to similar measures presented by other issuers; therefore, descriptions have been provided in the MD&A. For clarity, specifically defined non-IFRS measures are capitalized throughout this document, as are other terms as defined in the Glossary of Other terms and Measures.

Management believes that some non-IFRS measures are useful for investors to use to evaluate the performance of the Company without certain IFRS requirements that some investors may consider to be unrelated to the underlying economic performance of the Company. Management uses these non-IFRSmeasures to evaluate the performance of the Company.

Specifically, management presents an Adjusted Net Income before tax measure, along with related adjusted sub-totals. Adjusted Net Income before tax Per Common Share, Adjusted Return Pre-Tax on Adjusted Equity Ratio and Adjusted Return Pre-Tax on Earning Assets Ratios are presented where Adjusted Net Income is used in the calculation in place of Net Income. Adjusted Operating expenses do not include expenses associated with the Strategic review process. These measures do not have any standardized meaning under IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers.

For the Description of Non-IFRS Measures please refer to the section "Description of Non-IFRS Measures".

Rifco Overview

Rifco is built on a foundation of trust, respect, empowerment, accountability and passion which are exhibited by each and every member of the Rifco team, as we collaboratively pursue our collective vision and do so in a manner that is consistent with our purpose.

Rifco's operations are currently through its sole, wholly owned subsidiary, Rifco National Auto Finance Corporation (RNAF). RNAF operates with a purpose to help its clients obtain a safe and reliable vehicle by providing alternative finance solutions. RNAF currently distributes its alternative finance products indirectly through select automotive dealer partners.

The Company operates in all provinces except Quebec. The Company and its subsidiary are incorporated under the laws of Alberta with its head office situated in Red Deer, Alberta.

Rifco trades its common shares on the TSX Venture Exchange under the symbol "RFC" and is a tier 1 issuer. Since commencing lending operations in February of 2002, the Company has lent over $1.2 billion.

Strategic Perspective

As market conditions dictate, management makes strategic decisions to exploit various segments of the credit spectrum. The anticipated Credit Spread, or the difference between expected yield and forecasted net credit losses, is the most important piece of information in making these decisions. The analysis and forecasting of the Credit Spread Rate allows management to target those credit segments which have the highest returns.

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The Company manages two main strategic risk factors. First, the Company must possess competencies that drive acceptable credit performance. Second, the Company must maintain access to reasonably priced and appropriately structured capital and borrowings in order to fund its lending operations.

Rifco remains steadfast in originating finance receivables that it believes can achieve acceptable credit performance levels and profit margins. As margins are affected by funding rates and expected credit performance, the Company adjusts targeted origination levels, credit requirements, and lending rates while maintaining market continuity. Rifco will not pursue a strategy of seeking to increase its market share at the expense of unsustainable credit performance.

The Company funds its originated finance receivables through its own equity, bank borrowing, securitization and the issuance of unsecured debentures. Rifco maintains strong funding relationships and has been able to receive increased levels of funding capacity as needed.

COVID-19

The COVID-19 pandemic and associated lockdowns and government interventions are a continuously evolving situation without historical precedent for comparison and prediction purposes.

Rifco was identified as an essential service in Alberta and has remained operational since the start of the pandemic.

The Company has undertaken a number of initiatives:

• Rifco's entire team has been operationally tested to work from home with full access to all necessary systems and tools;
• Implemented extraordinary cleaning and hygiene practices, signage, and supplies;
• Reduced office, workspace and meeting room density limits;
• Reduced its human resources expenses;
• Credit tightening, increased proof of income thresholds, prohibited lending to borrowers employed in certain industries and tightened business rules deliberately reduced originations; and
• Adapted existing payment deferral and modification tools to accommodate affected borrowers.

Rifco's increased credit restrictions and documentation requirements had a meaningful impact on current year origination levels.

In the quarter ended March 31, 2020, the company increased its provision for loan losses associated with otherwise unimpaired loans. The Company has maintained elevated provision ratios for unimpaired loans. To date, delinquency and loan losses have not increased versus the pre-COVID periods.

While many financial services providers offered 6-months'no-payment' loan deferrals, Rifco focused on 1 to 3 months 'reduced- payment' deferrals. The COVID deferrals and loan payment modifications, that were previously granted, are now resolved. At the April 2020 peak, 10.9% of our loans had some degree of payment deferral in the month. At the end of the current fiscal year, only 3.3% of accounts were remaining in some sort of temporary modified payment arrangement. Most of the accounts that did receive COVID deferrals, received them early in the fiscal year, and are now reporting as having full scheduled payments due. As such, these accounts are either paying as scheduled, or are reported as delinquent.

Market Perspective

The majority of Canadians finance their vehicle purchases. A significant portion of Canadians require near-prime or non-prime financing for these purchases.

Rifco's major competitors include three large Canadian financial institutions that currently control a large portion of the near- prime ("B" & "C" credit) market in Canada. In addition, a number of mid-sized and smaller competitors exist throughout the near-prime and non-prime credit spectrum. Prior competitive behavior, which management had thought to be unprofitable and ultimately unsustainable, appears to be negatively impacting some players in the industry. Management is seeing rationalization within the industry as competitors consolidate, sell assets and cease operations.

3

Strategic Review

On February 3, 2020 Rifco Inc. announced that they had entered into a definitive arrangement agreement pursuant to which CanCap Management Inc. (CanCap) would acquire all of the issued and outstanding common shares of Rifco. The agreement was subject to approval of 66 2/3% of the votes to be cast by Rifco shareholders at a special meeting of Rifco shareholders that was held on April 3, 2020. The motion passed.

CanCap delivered written notice to Rifco on March 27, 2020 alleging termination of the arrangement agreement among the Parties dated February 2, 2020 in respect of a statutory plan of arrangement under the Business Corporations Act of Alberta. CanCap alleged that what it described as "recent events" constituted a "Material Adverse Effect" on the business of Rifco under the terms of the Arrangement Agreement. As such, the Purchaser communicated that it did not intend to close the Arrangement.

Rifco subsequently filed a Statement of Claim that named both ACC Holdings Inc. (ACC) and CanCap as a defendant, and asserted that ACC and CanCap breached the terms of the arrangement agreement by failing to attend at closing and fund the transaction contemplated by the Arrangement Agreement, and by actively opposing the issuance of a final order. Rifco sought specific performance of the Arrangement Agreement as a remedy.

CanCap filed a Statement of Claim that sought an amount of "no less than" $1 million as an "Expense Reimbursement Payment" as a result of what the Purchaser said was a breach of the Arrangement Agreement, which was that Rifco failed to warn the Purchaser about COVID-19 and a decline in oil prices which the Purchaser said constituted a "Material Adverse Effect" on Rifco.

The parties entered into a full and final mutual release and settlement agreement dated July 29, 2020, whereby the parties have, inter alia, released each other from all claims in connection with the Arrangement Agreement in exchange for a payment by CanCap and ACC Holdings Inc. of an aggregate of $1.5M (the "Settlement Amount") to Rifco. The Settlement Amount was paid to Rifco on July 30, 2020. The income is netted against the strategic review process expenses.

Corporate Update

On December 14, 2020 Rifco Inc. announced the results of its Annual General and Special Meeting. The shareholders replaced the existing board and elected Tim Peterson, Jeffrey Newhouse, Jared Priestner, and Sean Aylward to serve as directors. In addition, Jeffrey Newhouse succeeded Bill Graham as Chief Executive Officer (CEO) of the Company.

The Board has established the following near-term objectives for RNAF:

• Right-sizethe organization relative to its current client base, and work towards achieving a consistent 4% return on assets (ROA) managed, as measured by net income before tax, adjusted for non-cash changes in provision for impairment;
• Grow our existing client base and vehicle units financed by 10% organically;
• Grow our existing client base and vehicle units financed through accretive acquisitions; and
• Foster a culture of innovation and continuous improvement and focus on delivering an exceptional client experience to all our stakeholders.

Rifco further announced on April 15, 2021 a strategic initiative to foster a culture of innovation and continuous improvement and focus on delivering an exceptional client experience to all our stakeholders. Rifco will be collaborating with autologiQ Inc. ("autologiQ"), an online, consumer-focused, vehicle management company, co-founded by Rifco's CEO, Jeffrey Newhouse, and based in Oakville, Ontario.

This initiative expands Rifco's shelf of specialty automotive financial solutions to include autologiQ's 'Easy Monthly Payments' TM (EMP) program, an online, and physical point-of-sale repair financing solution for consumers. Additionally, autologiQ Clients will gain direct access to Rifco's specialty automotive financial solutions, delivered through autologiQ's digital platform and network of autologiQ Service Providers, commencing in Ontario.

The board is continuing its work on a full strategic review of Rifco and RNAF with the objective of determining its future strategic direction. Additional updates will follow in due course.

4

Results of Operations

The results of operations and cash flows for the year ended March 31, 2021 are presented in accordance with IFRS except for the adjusted line items.

The Company is reporting the following results over the comparable years:

					As at
					Mar 31, 2021	Mar 31, 2020
($,000's)
Finance receivables		197,789	197,789	228,959
Total assets			201,874	201,874	228,328
Total liabilities			178,399	178,399	202,270
Adjusted Equity	1,3		34,279	34,279	37,321
Equity	3			23,475	23,475	26,058
Delinquency Rate		2.74%	2.74%	5.55%
			For the three months ended	Year ended
			Mar 31, 2021 Mar 31, 2020	Mar 31, 2021	Mar 31, 2020
($,000's except per share and ratios)
Financial revenue	8,240	9,744	34,818	39,374
Credit losses		2,250	3,465	8,989	15,892
Credit Spread		5,990	6,279	25,829	23,482
Adjusted Operating Expenses 1,2	2,666	2,913	11,229	11,057
Adjusted Net Income before Taxes 1,2	1,075	660	4,908	1,280
Net income (loss) before taxes	893	(3,801)	6,506	(3,533)
Adjusted Net Income before Taxes per Common Share - Basic	$0.049	$0.031	$0.226	$0.059
1,2
Adjusted Net Income before Taxes per Common Share - Diluted	$0.049	$0.031	$0.226	$0.059
Net income (loss) per common share - Basic	$0.032	$(0.140)	$0.221	$(0.133)
Net income (loss) per common share - Diluted	$0.032	$(0.140)	$0.221	$(0.133)
Originations		20,584	24,021	57,259	108,326
Average loan receivables	194,058	224,580	203,647	225,252
Net Portfolio Yield	16.98%	17.35%	17.10%	17.48%
Credit Loss Rate	4.64%	6.17%	4.41%	7.06%
Credit Spread Rate	12.34%	11.18%	12.69%	10.42%
Financial Expense Ratio	4.64%	4.82%	4.76%	4.95%
Adjusted Operating Expense Ratio 1,2	5.49%	5.19%	5.52%	4.92%
Adjusted Return Pre-Tax On Adjusted Equity 1,2,3	12.71%	7.07%	13.71%	3.45%

1. See the section "Description of Non-IFRS Measures" for these definitions
2. Definition for Adjusted Net Income before Taxes has been revised to exclude the strategic review expenses and comparative year has been revised

accordingly.

3Equity ratios and figures were impacted by a dividend of $7.6M paid to shareholders on December 7, 2020.

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