Abstract: One of the ways to improve performance of MFIs is to encourage them to form strategic alliance. The purpose of this study was to assess the effect of strategic alliance management on the performance of Microfinance Institutions in Rwanda. The target population was 491 MFIs, and a sample size of 220 was determined using Slovene’s formula. Primary data for the study was collected by use of structured questionnaire. Structural Equation Modeling (SEM) was used to establish the relationship between strategic alliance management and performance of MFIs. The SEM results revealed that the model was significant (χ^2=23.56,p=0.0518) with the overall R2=0.588.