Abstract: This study examined the effect of microfinance lending dimensions on the business performance of selected Small and Medium Enterprises (SMEs) in Rulindo District, Rwanda. It evaluated the performance of SME businesses in respect to loan size, interest rates, loan repayment terms, and collateral requirements. The study used a quantitative method with descriptive and correlational research designs, guided by Credit Constraints Theory, Resource-Based View Theory, Financial Intermediation Theory, Pecking Order Theory, and Agency Theory. 371 respondents were chosen from the target group of SME owners and managers, and they submitted information using standardized questionnaires. The Statistical Package for the Social Sciences (SPSS) was used to analyze the data. Findings revealed that interest rates had a negative and substantial impact on SME performance (B = -0.219, β = -0.230, t = -4.543, p <.001), whereas loan size had a positive and significant impact (B = 0.349, β = 0.355, t = 7.533, p <.001). Collateral requirements exhibited a negative and significant association with SME performance (r = -.846, p <.01), whereas loan repayment period had a positive and substantial influence (B = 0.284, β = 0.276, t = 5.680, p <.001). Strong explanatory power was shown by the regression model, which explained 81.2% of the variation in SME performance (R2 =.812). To improve SME growth, performance, and sustainability, the study advises MFIs to offer sufficient loan amounts, reasonable interest rates, flexible repayment terms, and alternate collateral arrangements.