This paper investigates whether the country-level financial environment in which microfinance institutions (MFIs) have to work affects their operations. In particular, we argue that the efficiency of MFIs is determined by the extent to which financial markets of countries are developed. On the...

Traditional banks have proved to have severe limits in mitigating financial exclusion. The microfinance revolution is intended to address this problem by devising new approaches which ease credit access for poor and uncollateralized borrowers. In this introductory essay we present a special...