Micro-finance institutions can help build the foundation of the economy and help to increase the GDP of the countries in Africa. Micro-finance sector plays a very important role in the Rwandan economy. The Government of Rwanda considers financial sector development to be a high priority to expand financial services such as access to credit and savings mobilization and to mobilize long- term capital for investment. In Rwanda, the overall flow of institution credit has increased over the year, there several gaps in the system like scarce provision of credit to small and marginal farmers, limitations to formal agriculture financing due to the risks that are inherent to agriculture and paucity of medium and long-term lending. This study sought to study the trends of microfinance and to analyze the growth of agricultural credit in Rwanda. The secondary data used were based on the data gathering from different sources of published and non-published Journals, National Bank of Rwanda reports, Thesis and Rwandan Government reports. The study shows that short and medium- term credit provided to farmers have been the main sourced through financial institutions. The study revealed also that the major causes of non-performance of loans in Rwanda s ’ micro-finance institutions are weak internal capacities of microfinance institutions, inappropriate repayment capacity, lack of customer's education, inadequate collateralization and judicial processes, poor follow-up mechanisms, lack of supervision and lending at high interest rate to borrowers. The emerging keyschallenges in the Rwandan microfinance Industry are limitation of the institutional capacity, poor credit culture for rural client's microfinance, lack of transparency and communication, lack of Risk management systems and inadequate infrastructure. These have major implications for agricultural development as also the well being of the farming community. Efforts are therefore required to address and rectify these issues.